Talking Law with a Brett Moller
A recent documentary on the ABC was on ‘Elder Abuse’ and it focused not on any physical or mental abuse as such, but on fraud and financial abuse.
The study found an increasing number of elderly parents that had assisted their children financially and as circumstances changed for both the parents and the children, parents were not able to recoup monies from their children despite the promise of repayment at the time monies were loaned.
Many of such situations are not reported because the parents are embarrassed that their children are behaving in such a manner and they don’t want to involve lawyers and/or the police where in certain situations the action may amount to fraud.
Frequently parents wish to assist their children and their spouse or partner to purchase a home and lend monies to assist. Given the ‘family situation’ parents and children do not think this needs to be documented. However they should consider the ‘what if scenario’s’. What if the marriage or relationship doesn’t last and in a property settlement the property is to be sold and their is insufficient equity with the mortgage, legal fees and other expenses to have funds left over for repayment to Mum and Dad? What if the argument is put forward by the spouse or partner that the monies were not a loan but a gift that was not meant to be repaid and their is no paperwork or document to establish the loan?
Another common scenario I have seen is where often Mum and Dad sell their assets and provide funds to a married child with the plan to cohabitate with their child’s family in a granny flat or similar to assist the children and the young family in return provide some care arrangement for the ageing parent. As we know a family and home environment comes with a host of traits in personalities, different focuses in terms of working parents, children’s activities, financial pressures and day to day routines. If the relationship doesn’t work out how do Mum and Dad recoup where the child is not in a financial position to do so putting pressure on all of the families where the home relationship is not working and uncomfortable.
A sensible and prudent approach always is to treat these arrangements not as personal family matters but as legal transactions to be documented with parents and children and spouses understanding their rights and obligations so there is a clear path and expectation if certain events arise.
Your lawyer can assist in identifying scenario’s that should be protected against and guide you through obstacles and pitfalls in such family arrangements that gives clients peace of mind if the situation changes and unforeseen events arise .
Brett Moller – Consultant Lawyer – Vandeleur & Todd Solicitors