15/07/2026
The "Bank of Mum and Dad" continues to play a significant role in helping children purchase property, but as this recent Australian Financial Review article highlights, good intentions may have unexpected legal and financial consequences.
From a family law perspective, one important issue is the 'presumption of advancement' which is the legal presumption that money provided by a parent to a child is intended to be a gift, rather than a loan. Unless there is clear evidence that the funds were to be repaid, they may be treated as part of the asset pool if the child later separates from their partner. Proper documentation at the time the funds are advanced can make a significant difference. As is highlighed in the article, "informal agreements work until they don't" and it is much cheaper to obtain advice and have proper documentation prepared at the time than it is to deal with a dispute in the future.
If you would like advice about how these issues may affect you or your children from a family law perspective,, contact our office to arrange an appointment with one of our family lawyers
Estrangements, different recollections of what was agreed on, and handshake deals are just some of the risks parents face when lending money to adult children.
