Australia: Living with family or friends: What is at stake for the elderly?

Property Law Update

Often an elderly person may elect to reside with family and/or friends as an alternative to living in an Aged Care Facility. In the majority of cases the reasons for moving in with family or friends would include:

  • the need for care or assistance with daily living
  • wanting companionship
  • a cultural expectation to move in with family members
  • family pressure or compassion for an elderly relative
  • limited spaces in an Aged Care facility

The decision to do this however should not be taken lightly and all of the people concerned should be involved in the decision-making process.

What are the considerations?

Regardless of whether the decision to live with family or friends is a temporary arrangement or intended for the long term, it is important to consider the following:

  1. What assessment (if any) has been done to determine the level of care required or dependency of the elder person? Would the elder person submit to an assessment if required in the future and are all parties willing to implement any recommendations following that assessment should the need arise?
  2. What level of care can be provided?
  3. Is there a need for alterations to the residence?
  4. How long can the family members/friends sustain or provide the required level of care?
  5. What care may be required in the future?
  6. Would the elder person accept outsourced care in order for respite relief of the family/friends?
  7. How will it affect the family/friends financially and psychologically?
  8. How will it affect the elder person both financially and psychologically?
  9. What if the family/friends want to sell the residence?
  10. What security is able to be given to the elder person if the elder person contributes capital into the residence?
  11. What expectations do the parties have regarding privacy, confidentiality, access to personal information, having their comments valued, being part of decisions about the level of or type of care?
  12. Are the parties able to live and (if necessary) resolve disputes amicably?

The above list is not exhaustive and many other issues may surface depending on the particular circumstances of the parties. Having an open mind when discussing living arrangements is paramount to working through those issues.

Often, important issues are overlooked or considered irrelevant. There have been many cases where an elder person has resided with families/friends and those relationships have been strained. The elder person has to be cautious that their financial security does not diminish and that they understand the intentions of the friends and/or family members (ie, whether there are any underlying motives).

When things don't work out

A case that has been applied, considered and cited in many other cases involving elderly people living with family/friends is the case of Morris v Morris NSW SC MacLelland J in Eq., (1982) NSWLR 61.

In this particular case, an elderly father sold his unit to live with his only son who was married with two children. The proceeds of the father's unit were paid towards the construction of a second storey extension to the son's house where the father would reside. There was no prior discussion of the living arrangements, what would happen if the relationship between the son and daughter-in-law broke down, or if they simply just wanted to sell the house.

Ultimately the house had to be sold when the son's relationship with the daughter-in-law broke down. This left the elderly father with a legal battle to recover the capital he had paid towards the son's house for the extension.

You should be aware of the difficulties that may arise in the absence of open discussion and documentation for agreed living arrangements.

It may be an expectation that the parties' friendship/family relationships will prevail in these circumstances; however, the above case highlights the importance for all parties to have open discussions about issues that could arise in the future and express their intentions and expectations.

How can problems be prevented?

It may be beneficial for the parties involved to enter into a mutual agreement that would take into account all of the foreseeable circumstances that may arise from the living arrangements and outline the needs, obligations, rights and/or entitlements of each party to that agreement.

This kind of 'living arrangement' agreement may also assist with minimising disputes and/or litigation in this area of law. Further, given the complexities of these types of matters, and to prevent the agreement from being declared void, (for example on the grounds of coercion), each party should be independently represented. The parties may also want to consider obtaining independent financial advice prior to formalising a living arrangement agreement.

At Coleman Greig, our experienced property team lawyers can:-

  • make recommendations and/or advise about what sort of issues should be contained in a living arrangement agreement;
  • negotiate what is to be included in the agreement with the relevant parties;
  • prepare the agreement together with any ancillary documentation (eg, caveat/second mortgage if required for security of capital, etc) and arrange for execution of those documents; or
  • provide legal advice to those who are already in a living arrangement who are experiencing (or concerned about) issues that could result from those arrangements.

Whilst a living arrangement agreement may seem very "formal", it can often result in a happier and more relaxed atmosphere in which there is no confusion or worry for the people involved.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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