It is very common that parents (or other family members) provide their children with assistance when purchasing their first home. If their child gets divorced from the person they purchased their home with, the money that the parents provided could be included in the asset pool (ie, part of it could be given to their partner) if it is given by way of a gift.
If these monies are advanced to the child as a bona fide loan, the amount of money that was provided will be sequestered off from the asset pool and will not be included in the division of assets of the parties.
It is also very common that parents, children (and other parties) assist each other in this fashion but do not have proper documentation and are not entering into genuine loans, instead entering into ‘sham loans’ in order to protect their children in the future. Whether or not these ‘loans’ will be considered bona fide and not a gift, will depend on the details of the case. It is advised that you contact our office to obtain personalised advice as to whether your specific circumstances will be characterised as a loan or a gift.
To arrange an obligation free and free 30-minute consultation, please contact our office on:
(03) 9005 8284
reception@brlg.com.au
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