Smallwoods Lawyers: Family Financial Disputes & Settlements
Family Lawyers Specialising in Family Disputes, Resolutions and Agreements
Family financial dispute resolution
Smallwoods Lawyers – based in Brookvale on the Northern Beaches - has advised on family planning matters and family dispute resolution for over 40 years. They offer quality legal advice to a diverse range of individual and commercial clients in regards to this part of the law, as well as many other sections of the legal world.
Smallwoods Lawyers’ aim is to provide fast, accurate and timely legal advice as well as be cost effective.
The company was established in 1976, and since that time, it has undertaken a variety of legal work, including many family dispute resolution cases.
It is a natural inclination between family members not to have the nature, effect and intention of their financial family dealings recorded in legal terms. However, if families start disputing over matters, this all can have significant adverse impacts on the family.
Smallwoods Lawyers, located in Brookvale in Sydney’s Northern Beaches, has been involved in very costly Supreme Court proceedings between family members that could have been avoided if the service of family financial dispute lawyers had been used prior to the incidences.
Loaning Money to a Family Member?
Family financial dispute lawyers Smallwoods Lawyers says, “Be wary so you avoid having to work out a financial dispute resolution.”
Looking to give a family member a financial head start? Be aware of the risks – they could be very costly and potentially could even come down to the need for a financial dispute resolution between the parties.
Consider the following: A 35-year-old male borrows money from his parents to help buy a unit. He purchases the unit, thanks his parents, and they all celebrate and life goes on.
At a future date, the son’s business financially begins to suffer due to financial difficulties and eventually goes into liquidation.
As is common, the bank holds a mortgage over the unit. This mortgage is an ‘all moneys’ mortgage scheme, meaning that all debts owed by the son to the bank were covered by the mortgage, and this cannot be financially disputed by the parents or their son.
The parents are unsecured creditors as they did not have their son sign a loan agreement and have no other written evidence other than bank records to indicate they had lent the son money.
Being an unsecured creditor, the parents rank equally with all other unsecured creditors in the son’s bankruptcy.
This scenario is all too common and usually comes with many complaints and disputing by both parties, but the situation could have been easily prevented by the son and parents entering into a loan agreement in which the son ‘charged’ his interest in the unit to rank behind the bank’s first mortgage.
If you are considering undertaking financial transactions with family members, seek good professional advice surrounding family law litigation. Not doing this could be a very costly exercise.
Family financial dispute lawyers Smallwood Lawyers says, “Securing your parents’ future can come with a nasty sting if you don’t have a financial settlement agreement.”
Helping our elderly parents to live out the years in comfort and safety is a noble deed, but be sure to document your arrangement. Not doing so may bring about a very expensive lesson.
Here’s a scenario to consider: Ageing parents sell their home and use the proceeds to build an extension on their daughter’s home. The family feels that this is the ideal way for the mum and dad to have some independence and to feel safe and secure.
The daughter lives with her husband, owns the home and has two children.
Initially, the arrangement works fine and everyone is happy with the outcome at the start. Over time however, the daughter and her husband drift apart and eventually they seek a divorce. The main asset is the family home.
Unfortunately, the elderly parents are not on the title of the property and there is no documentation evidencing the contribution of finance and the living arrangements.
The divorce is finalised and the family home has to be sold as a consequence of family property proceedings. The extensions have increased the value of the home, however the parents are not entitled to any of the sale price. Instead - the husband walks away with a windfall.
To avoid nasty expensive surprises like this, the parents’ financial interest in the property and their rights should have been documented.
Another part of family law litigation: Assisting Adult Children To Buy Their Home so there is no need for a family dispute resolution
To safeguard everybody's interests, it is extremely important to document the arrangement.
Here’s another case study: Parents June and Ray want to assist their daughter and son-in-law purchase property. They are not sure whether to provide the funds as a loan or a gift.
What should they do? Get advice!
Here are some considerations:
- Does the daughter or son-in-law carry on a business that exposes them to risk?
- Is the daughter's marriage solid?
- What happens if daughter predeceases her parents after the loan is made?
These are just some issues needing to be addressed – and there are many more.
Most importantly, it is crucial that you document the terms of the loan, including:
- Is it repayable on demand or by a future date?
- Is the loan interest-free?
- Determine whether the interest only accumulates from the date of demand for repayment.
- Consider charging the interest of child and/or child spouse with a first or second mortgage.
The above factors may be important in future family law proceedings between your child and their spouse.
Also, remember to consider estate planning issues of parents, such as granting the child an option to purchase or alternatively set off the value of the loan or interest in property against the child's interest in the parents' estate.
Smallwoods Lawyers assisting on the North Shore and Northern Beaches regions
Smallwood Lawyers are based in Brookvale and provides advice on all things family law to customers throughout the Northern Beaches – from companies to individuals. They have clients in Pittwater suburbs such as Avalon, Newport, Palm Beach, Warriewood, Mona Vale and Narrabeen, as well as clients in southern peninsula suburbs like Belrose, Brookvale, Collaroy, Dee Why, and Manly and Manly Vale, as well as other surrounding suburbs in the region.
The specialist legal firm also covers the North Shore including Chatswood, St Leonards, Lane Cove, Artarmon, Cremorne, Mosman, Neutral Bay, Willoughby, Crows Nest and North Sydney, plus many more surrounding suburbs.
If you want quality advice on anything to do with family law and dispute resolution without the expense sometimes associated with city CBD lawyers and other lawyers around the Northern Beaches or North Shore, contact Smallwoods Lawyers today.