When Children Divorce...Common Law Family Law Questions Asked By Grandparents
Property Issues
I gave my daughter $50,000.00 for the deposit for the first home with her husband. Now they are divorcing. Is her husband entitled to half of that money?
Generally, all of the property of both spouses (regardless of how it was acquired) is included in the marital asset pool for division between them. Therefore, your gift of $50,000 goes into the pool. Your gift will be presumed to be a contribution made on behalf of your daughter which may result in her being entitled to a greater share of the pool. The contribution of your gift however may be balanced by other financial and non-financial contributions. The Court will also look to the future financial needs of each party and give a greater share to a spouse with greater needs. If you gave your daughter the gift some years ago, it may be of less significance in dividing the asset pool now.
It may have been preferable to 'lend' the deposit to your daughter rather than give it by way of a gift (see below).
I want to lend my son $100,000.00 to help him establish a business. What happens if his wife leaves him?
The first step in dividing the property of a marriage is to calculate the total asset pool available for division between both spouses, taking into account all of the assets and debts. Generally, your loan to your son would be treated as a loan owed back to you in the event of him separating. His wife may argue that the loan is not owing to you, or that is has been waived by you. It is not uncommon after separation for a dispute to arise over whether money is lent to a spouse by another family member, or is, in fact, a gift.
Before lending the money to your son you should consider carefully how the loan should be documented to protect both you and your son. It may be advisable to enter into a loan agreement with your son that sets out the terms and conditions of the loan. You should keep clear records of the original amount lent and any amounts repaid. You might consider securing the debt by requiring that your son give you a mortgage over real property. It will then be necessary to consider whether the mortgage should be registered against the title or not. Proper documentation of the loan will prevent your son's wife disputing the existence of the debt in the event of separation.
My husband has died and my daughter and son-in-law have asked me to move in to their house. I want to build a granny flat at the back of the home, which will cost me $65,000.00. Do I get my money back if they separate?
Unless you become a registered proprietor of the property, you have no immediate right over the property. In the absence of any clear agreement, your legal rights to require repayment of the $65,000.00 (or the amount by which the granny flat has increased the value of the property) are unclear. You may be entitled to make an application to a Court to receive an interest in the property. Alternatively, if your daughter and son-in-law become involved in Family Law proceedings, you may be entitled to intervene in those proceedings.
A preferable course of action however would be for you, your daughter and son-in-law to enter into an agreement before the construction of the granny flat to avoid any uncertainty or dispute in the future.
My children own a five- acre property. My wife and I spent my superannuation payout of $200,000.00 building a home for ourselves in the back paddock. Do we own the house? Can we leave the house to be shared amongst all of our children in our Wills?
Unless you are registered on the title of the property, you have no rights as the property owner. You may have some rights to make an application seeking a declaration of an interest in the property in your favour. Such proceedings can be costly and unpredictable. Ideally, you should have had your children agree to you being registered on the title of the property before the construction of the home. You should seek legal advice now to attempt to negotiate an agreement with your children to protect your interests. As you currently have no legal interest in the property, you cannot leave it to the beneficiaries of your Will.
I tried to help my son after he got married three years ago by selling my own home to him and his wife at a reduced price of $270,000.00. I think it was really worth $350,000.00 back then. I always thought that they would pay me the difference of $70,000.00 if I needed the money. They are now divorcing and the wife says the house was only worth $170,000.00. Is that fair?
It is common for family members to sell properties to relatives at a reduced price. This may assist relatives to acquire real estate. It may also reduce stamp duty payable on the transfer. Unfortunately, a Court will normally only take into account the value of the property shown on the Transfer and used for calculation of stamp duty. Such informal arrangements in respect of the transfer of property (initially intended to assist family) can create significant difficulties years afterwards when relationships fail or disputes arise.
An alternative course of action would have been to obtain a valuation of the property at the true market value ($350,000.00) at the time of the transfer. However you would then have been required to pay stamp duty on this value.
Children's Issues
What rights do I have to see my grandchildren?
Grandparents do not have any automatic rights to see or care for their grandchildren. Happily, most parents who separate are able to reach sensible and informal agreements in respect of the care of their children (including spending time and communicating with extended family members such as grandparents). If a sensible agreement cannot be reached, grandparents as well as other persons significant to the care of the children may make an application for parenting orders. The Family Law Act recognizes that one of the principles underlying the parenting provisions under the Act is that unless it is or would be contrary to a child's best interests, children have a right to spend time on a regular basis and communicate with people, such as grandparents and relatives who are significant to their care and welfare. Your lawyer may be able to assist you in negotiating parenting orders to include agreed times with grandparents.
