What Happens If Our Parents Lent Us Money To Purchase Our Property? – Podcast Episode 50

 

Today on the podcast, Director Caralee Fontenele will be speaking about what happens in the event that either party have lent the couple funds to purchase a property. Do the parents get paid back?

The Australian Financial Review found that “Mum and dad are the ninth-largest lender of loans in Australia!”

The Family Court has a wide range of powers when determining the financial matters between married parties. The crucial distinction between monies loaned or monies gifted is what is explored. The answer to the question can range regarding the consequences of these loans or gifts and how these monies will be treated in the Property Settlement.

If parents of adult children want to gift money, that is fine, but they have to understand that it is a gift to the couple – not the individual child.

If parents want to loan money to the couple, they can do a few things to protect their loan in the circumstances of a relationship breakdown.

These may be:

  1. Draft a loan agreement;
  2. Draft a BFA;

Without these documents, it can be tricky, although having an email trail, monthly payments, any source of proof that this was indeed a loan will assist you in ensuring you see the loan returned.

Listen to the full podcast here!

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