Navigating property settlements with adult children

It doesn’t always matter whose name the property is in. The law recognises both financial and non-financial contributions, such as providing care, maintaining a home or helping with living costs.

Top 3 messages about navigating adult children’s property settlements:

1. Many older people help their adult child financially, either with a loan, a gift or a conditional arrangement.

2. If your adult child’s partner relationship breaks down, a property settlement may arise, and your financial assistance needs to be considered in the settlement.

3. Seeking legal advice as soon as possible is very important, because your wellbeing and financial security are as important as your child’s.

Many older people help their adult children or other family members with financial or practical assistance. You might have contributed money to a daughter and son-in-law’s home deposit, let your child and their partner live with you, or helped with bills, buying a car, renovations or childcare.

If that family relationship ends and a property settlement begins, it can feel like the ground has shifted under your feet. You may suddenly find yourself asking:

• ‘Will I get my money back?’

• ‘Where will I live?’

• ‘Do I get a say in what happens next?’

This article follows the path many older people travel after relationships falter and explains the key things you must know when property or financial arrangements need to be sorted out.

‘We just wanted to help. We never thought we’d end up in the middle of their separation.’

Understanding your rights

When property or money needs to be divided after a couple has separated, Australia’s family law looks at:

• what each person contributed

• what each person needs now and into the future

• what outcome would be fair overall.

It doesn’t always matter whose name the property is in. The law recognises both financial and non-financial contributions, such as providing care, maintaining a home or helping with living costs.

When you seek legal advice, the lawyer will ask you to explain your story in your own words. You should show them copies of any documents (which includes emails and text messages) you have so they can help you understand what the law says about your situation and what options you have.

Gifts, loans and ways of ‘helping out’

Many parents who have handed over money to family members say, ‘We didn’t write anything down. We just wanted to help. We trusted them.’ Even when you have a loving, trusting relationship with your family members, it is still important to formally document any financial agreements to avoid confusion down the track.

In order to know what your legal rights are, it needs to be clear what your intentions were when you provided money or support and what both parties understood and agreed to. When you handed over the money:

• Was it a gift? (You didn’t expect it back.)

• Was it a loan? (You expected it to be repaid.)

• Was it a conditional arrangement? (You gave support on the understanding that you’d receive something in return, such as long-term accommodation or shared family living.)

Even if it wasn’t written down, the intention behind your support matters. A lawyer can help you explain what you understood at the time and why that matters now.

Maria’s story

Maria gave $180,000 to her son and daughter-in-law for major renovations to their home. Maria believed this arrangement meant she could live with them as she grew older, in a self-contained area they were creating just for her.

Years later, the couple separated. There was talk of selling the house. Maria suddenly faced 2 frightening questions:

• ‘Where will I live?’

• ‘What has happened to the money I contributed?’

Maria sought legal advice. With support, she was able to:

• explain what she had contributed and why

• describe the understanding she thought they all shared

• show bank transfers and a text message from her daughter-in-law thanking her for ‘the renovation loan’.

These records helped clarify what was intended. Maria’s contribution to the property was taken into account as part of the couple’s property settlement negotiations.

This kind of example is common. Many older people make arrangements based on trust, love and family understanding, not formal agreements.

Becoming involved in your child’s separation

If your adult child separates from their partner, you may become part of the property settlement because:

• you contributed money to a home

• the property is partly in your name

• the arrangement affects where you live

• you made a loan or investment

• you’ll be affected by the outcome.

If your family members aren’t prepared to fully acknowledge your contributions and make formal arrangements to repay your share, you can seek legal help.

Family law allows for ‘third parties’ to be included in the legal process when needed. This simply means the Court or the negotiating lawyers need to take your situation into account. It ensures your rights are considered along with everyone else’s.

Ideally, each person agrees to sit down with a qualified Family Dispute Resolution practitioner or mediator to reach a fair, enforceable agreement. If the family member won’t come to mediation, your lawyer can help you with a court process.

Being included in mediation or being a third party to a court matter doesn’t mean you’ve done anything wrong. It’s just a way of making sure the final agreement is fair for everyone.

Why good records matter

Clear records can make a difference. They help you explain what happened and support your version of events. Useful records include:

• bank statements

• receipts for renovations or bills

• emails or text messages discussing arrangements

• notes from conversations

• any written agreement, even if it’s simple or informal.

People often say, ‘I didn’t want to make it formal. It was family.’ That’s completely understandable. But even small pieces of written information can help to clarify later what the agreement was.

A simple step-by-step way to approach the process

Here is one way to move through this situation:

1. Pause and reflect. Think about what you contributed and what you hoped for at the time.

2. Gather any records you can. Even small pieces of information can help.

3. Get legal advice early. A lawyer can explain your rights in clear language. Let them know if you need an interpreter or can’t understand some of their jargon. It’s okay to ask them to slow down or explain things again.

Where and when to get support

There are free, confidential services for older people who are dealing with property or financial issues involving adult children. These services can help you understand your rights, plan your next steps, and find support if conversations become difficult.

Call the national ELDERHelp line on 1800 353 374 to reach the service closest to you.

You can also contact a community legal centre or Legal Aid office in your area for information or advice. Early support leads to better outcomes and reduces stress for everyone involved.

If Court proceedings have already started

Sometimes older people find out after the separation that their child and former partner have already begun court proceedings about property. If this happens, it’s important to act quickly.

A property settlement can move ahead without you unless the Court is told about your contribution. If final orders are made and you weren’t included, it can be very difficult – and sometimes impossible – to have your interests recognised later.

A lawyer can help you:

• notify the Court that you may need to be involved

• explain your contribution and how it affects the property pool

• protect your rights before decisions are finalised.

Understanding time limits

Family law has strict time limits for starting property settlement proceedings:

• For married couples, applications generally must be made within 12 months of the divorce becoming final.

• For de facto couples, applications generally must be made within 2 years of separation.

If your child’s former partner begins a court application within these time limits, your interests may be affected, even if you weren’t aware it was happening.

If you become aware that any of the following events have happened, it’s very important that you get independent legal advice straight away:

• a Family Dispute Resolution or mediation invitation has been sent

• a lawyer’s letter has arrived

• Court papers have been filed.

Acting early gives you the best chance of being heard and having your contribution properly considered. Don’t go to a lawyer assisting other family members – get your own, independent advice from a different lawyer.

Moving forward with clarity and confidence

Family financial arrangements can be complex, especially when they are based on trust, care and shared family history. You’ve done your best to support your family, but your own needs, interests and wellbeing are no less important.

Taking the time to understand your options can help you make decisions that feel fair, safe and respectful — for you and for your family.

If you are thinking about helping a family member financially, you can suggest a formal family agreement be drafted up front – not because you don’t trust your family member, but to have the comfort of knowing that if something unforeseen goes wrong, it is clear what will happen. That gives you and your family member the best chance of keeping your relationship strong.

Disclaimer: The information provided on this website is not a substitute for individual legal advice.