What happens if I become ill and need assisted care?

What happens if there is a divorce or remarriage?

How will the loan or gift affect my Centrelink benefits?

With Sydney’s increasing house prices and an ageing population of baby boomers, it has become increasingly common for older parents to sell their home and build a granny flat on their children’s property or add a renovation to their children’s house so they can provide mutual support to each other. Alternatively, parents may lend money to their children to help them buy a home or investment property.

For most people, these arrangements start out with good intentions. However, if unforeseen events occur, such as a divorce, ill health or financial difficulties, one person may want or need to get out of the arrangement unexpectedly. Alternatively, other children can become disgruntled at the family home being sold and potentially losing part of their inheritance.

When these situations occur, they can cause great stress and family conflict. Sometimes, in the worst of cases, family members initiate court proceedings against each other to attempt to resolve the situation.

There can also be hidden and unexpected consequences of selling the home and loaning or gifting money, such as reducing or losing Centrelink benefits if matters are not arranged in a way that complies with Centrelink requirements.

To avoid potential pitfalls, families need to have some frank discussions and obtain legal advice before entering into these arrangements. These discussions are much easier to have when everyone is well and happy with each other, rather than when there is pressure to resolve or conflict within the family.

These discussions should include what would happen if:

• The elderly parent/s become gravely ill and need to get their equity out of the combined family home to move into assisted care facilities; or
• The adult child’s marriage breaks down and they need to settle property division with their ex-spouse; or
• One of the parties dies or re-marries or gets a job in another state or city.

It’s understandable that parents want to help their children. However it’s important to obtain independent legal advice before finalising arrangements or signing any documents.

At Bateys Family Lawyers, we can help you to negotiate an agreement before you enter into any arrangements. This will specify how you and your family can modify the agreement if it becomes necessary due to changed circumstances.

For peace of mind, contact us on 02 9792 1833 to discuss your individual circumstances.