Preserve family relationships

Relationship Breakdowns

As hard as it is, you should plan for the worst and hope for the best.

Relationship breakdowns happen all too frequently, so it’s important to make sure you have the right agreements in place to cover all these eventualities.

Whether a relationship breaks down or there's confusion about a term in the loan, it's useful to note every agreement down and have it signed by each party.

Make sure everyone understands the implications; especially of a gift versus a loan.

It’s wonderful when both sets of parents want to help the couple with their deposit but it could get complicated if the relationship breaks up.

Document the help that has been given by all parties and agree how this translates into ownership of the home. This can be in absolute dollars (e.g. $100,000) or proportion (e.g. 20%).

Consider what happens to the agreement if one of the parties opts out or they run into problems and need the money earlier than expected.

These can be difficult discussions, but it is always best to have them now, as they get far more tricky down the track.

And you should always seek advice from a trusted source before committing to a decision.

When giving one child a loan, consider any other children.

Your children are unique, and their financial needs are as individual as they are.

Your other children may need help for a home loan, a student loan, or healthcare.

Don’t let an agreement with one become a potential issue for another. You should consider whether you will feel obligated to provide similar help to other family members and whether you can afford to do so.

Talk about it with the whole family, make the right plans and put the agreements in writing to be completely transparent and save any heartbreak later. Consider getting legal or financial advice to add an extra level of comfort.

Document everything. Stop dreams from becoming a nightmare.

Even though you have the best of intentions and are only looking to give your child a leg up... Document everything.

It may save you later on and could prevent future heartbreak and family arguments. Make sure to insert exit clauses where possible, to document what will happen if a break-up or other significant event happens.

Work out how your help may be deducted from the estate prior to any proceeds being shared amongst beneficiaries.

Every circumstance and possibility must be clearly recorded and made clear to all parties. To be clear, you will need to ensure you adjust your will accordingly to record your intentions, but your child will need to create a will and record the information in theirs too. This is because loans last a long time and circumstances can change overnight.

We acknowledge it’s often hard to discuss delicate financial matters with your children, but the right conversations can be sparked by following our documents which will help you to clarify your intentions clearly so you can record them properly.