A family agreement is an arrangement between an older person and someone else (usually a family member, friend or carer) regarding care and living arrangements.
The arrangements should be mutually beneficial. The most common family agreement involves the older person exchanging their property or assets in return for housing (and/or care) as they age.
Other common family agreements include:
co-purchasing a property and sharing a home
building an extension or granny flat on the property of an adult child
an older person transferring ownership of their property but continuing to reside there
financial agreements such as loans, gifts and home loan guarantor arrangements.
Life has a habit of throwing up unexpected challenges. Issues can arise when the potential consequences of the arrangements have not been thought through or an unexpected change has occurred. This might include:
conflict, tension and abuse leading to the breakdown of relationships (between parties or between other family members)
people not doing as they promised
the older person requiring more care than the family members are able to give
financial stress or bankruptcy
sudden death or illness.
Where a family agreement has broken down, there are legal and civil options available to help people resolve the dispute.
Contact 1800 ElderHELP (1800 353 374)to speak to the elder abuse service in your state or territory. They will be able to provide information and advice specific to your situation.
Step 1 – Think about what you want and need.
Discuss the idea with family and friends so everyone is on the same page. Don’t make decisions to please other people, or when people are putting pressure on you.
Step 2 – Seek legal and financial advice.
If large sums of money are involved there might be pension, tax and financial implications. Plan for the worst-case scenarios and hope for the best. For example, think about what might happen if your family member cannot repay money you lend them or needs to sell the house you are living in.
Step 3 – Have a formal family agreement drawn up by a lawyer.
Sometimes things go wrong, and you have a better opportunity of seeking redress and recovering financial contributions if the arrangements have been formally documented. A written contract will help you protect your financial contribution and make sure you can move on and maintain your independence.