IN BRIEF

We find that many of our clients see us once they have encountered issues during a divorce, rather than seeking advice from the get go. Seeking advice from the outset ensures that our client's money is properly protected on the divorce of their children.

Parents often gift or loan money to their children to help them financially purchase a property or set them up in a business, or they may sell their own home to their children for a sum lower than its true market value. When they lend a hand to their children in this way they often don't intend that their daughter or son-in-law will one day part with some of that money if they separate or divorce.

If you are going to loan money to your child you must document it properly. If you don't you could find your son or daughter-in-law making a claim to those assets and they may well be successful in that claim.

If you blend your money with your children's money make sure the arrangement is properly formalised so there can't be arguments in the future. You might think nothing of it at the time but find down the track once your child is in the midst of a separation that you wished you had secured the arrangement better, especially when you see the estranged partner making a claim to that money.

Grandparents can also find themselves in a difficult position after the divorce of their children in being able to continue their relationship with their grandchildren. The grandparent may have been very involved in their grandchildren's lives but after the separation of their grandchildren's parents they find that they have been forgotten in the arrangements that are set up. Grandparents are able to go to the Family Court and insist that it is in the child's best interest to spend time with the grandparents, however having to do this should be a last resort. Being able to work out an arrangement to see the grandchildren without having to go to these lengths is always best.

Happily we find that most parents who separate are able to reach sensible agreements about the children which include spending time with extended family members and their grandparents. However our tip is that even though you may want to become involved in the dispute between your child and their partner it is better if you are able to make an effort to rather remove yourself from that situation and not take sides. This will protect your position as a grandparent and be your best chance at ensuring that you maintain an ongoing relationship with your grandchildren well into the future.

For further information please contact:

Melanie Rubin, Senior Associate
Phone: +61 2 9233 5544
Email: mrr@swaab.com.au

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.