Hello and thanks for using Just Answer.
My name is ***** ***** am happy to assist you with your enquiry.
As you are probably aware, as you will not be on the Mortgage, you won't be entitled to go on the Deeds to the new property, and hence you will not be a legal owner of the property. Your Solicitor is therefore acting correctly in advising you to take advice as to whether you would like to protect your financial interest in the property.
If you decide to do nothing, which is your decision, you just need to be made aware that the £160,000 you are putting into the property may get "lost" if any of the following unfortunate events happens-
1. your daughter runs into financial problems/can't pay the Mortgage and the property is repossessed.
2. Your daughter/son in law runs into financial problems and is made bankrupt. The Trustee in Bankruptcy would be entitled to request that the property be sold to enable the debts to be cleared.
3. If your daughter divorces, and the property needs to be sold, her husband may walk away with a percentage of the proceeds of Sale.
4. If your daughter dies prematurely, the house will pass to her husband, and he would then become the sole legal owner, and therefore be entitled to deal with the property as he so wishes.
I would hope none of the above events would ever happen, but as a Solicitor, you always have to look on the bleak side and advise your client accordingly.
It is of course up to you, but you may just want to get a Declaration of Trust drawn up, which will basically set out that you do indeed have a financial interest in the property. Without a Declaration, there won't be any evidence that you have contributed to the purchase. You wouldn't have to enforce the Declaration of Trust - it is merely a piece of paper setting out that you have contributed £160,00 towards the purchase -and you could destroy it at any time, but it could be used as an "insurance policy" for you in the unlikely event of any of the above scenarios happening.
I hope this assists you and sets out the legal position.