Protecting your home

No-one should lose their home as a result of abuse. Here are five steps you can take to protect your most valuable asset.

It’s important to make sure your financial and legal affairs are in order, especially when it comes to your home. If you haven't protected your interests:

• You could lose all the money you put into the property

• You may have to take legal action against your family to recover it

• The law may consider that you intended to gift the money to your child rather than lending it without wanting it back

• You could end up homeless with your pension reduced

Although most families work things out well, if things don’t work out as planned, there are things you can do to make sure that your right to a share of the property (your “legal interest” in the property) is protected. These tips can also help you avoid stressful and expensive legal action.

1. Get a formal agreement in writing

Most people don’t think about putting things in writing or getting advice from a lawyer when making agreements with family members. However it is a good idea to have a formal agreement whenever any arrangement involving significant money or property is involved, regardless of who the agreement is with.

Wanting a formal agreement doesn’t mean you don’t trust your family. Even if you are confident that your relationship with your family member won’t deteriorate, there are good reasons why you should have a formal agreement.

• It will help you and your family to be clear about each other’s intentions and expectations. For example, if the money you contribute is intended to be a gift or not. Also, your ideas about what support or care you are expecting them to provide may be quite different from what your family is contemplating.

• If there is nothing in writing, Centrelink might regard your contribution as a gift and your pension could be reduced.

• It will help you and your family talk about and agree on what you want to happen if the arrangement does not work out as expected for either of you.

• If there is uncertainty about what was agreed, the written agreement will help resolve any disagreement.

2. Get legal advice

You should get independent legal advice before you make any big decisions, like deciding to move in with your family. This means seeing a lawyer who has not been seen by your family, and speaking to the lawyer without anyone else in the room.

A lawyer can help you with a written agreement and give you advice about what else you can do to protect your interests. The cost of getting this advice may save you much more money in the long term if things went wrong.

3. Hope for the best (but plan for the worst)

When preparing a family agreement, both you and your family need to understand what is being agreed so there will be no misunderstandings down the track. It is also important to anticipate what would happen if the arrangement is no longer workable, or if things happen in the future over which you have no control.

4. Think about your pension

Financial or shared living arrangements may affect your pension entitlements. Centrelink has special rules for granny flat arrangements. You can read more about these rules on this Department of Human Services web page.

5. Get legal advice quickly if things do go wrong

It is important to get legal advice as soon as there is any disagreement. If you delay getting advice you may lose the opportunity to take steps to protect your legal interest in the property. It’s worth remembering, the law has time limits for certain types of legal action.