Plan to part company** - the need for property owners’ deeds

Last week’s post summarised some of the key issues to consider in relation to agreements documenting arrangements between parents and their children for the provision of elder care.

Where substantive assets, particularly housing accommodation, are to be jointly acquired by a parent and one or more children, best practice is to implement a formal deed setting out the exact terms of the arrangement.

Generally, it will be appropriate to implement a deed that has provisions, which are virtually identical to the type of arrangement entered into by arm’s length parties who jointly own property, or for that matter, family or friends who jointly acquire property where there is no elder care relationship in place.

The exact provisions of any agreement will obviously depend largely on the circumstances.

An example of some of the provisions normally included is as follows:

1. the exact financial obligations between the parties;
2. rights of access to the property;
3. term of the agreement;
4. events that will trigger an ending of the agreement;
5. rights of first refusal or pre-emption if a party wishes to sell their interest;
6. circumstances in which a sale of the entire property is to take place;
7. whether any existing joint owner can attempt to acquire the entire property if a forced sale takes place;
8. to the extent the property will be rented in a holiday pool, the basis on which a co-owner can access the property;
9. how costs are to be apportioned;
10. what is to occur if a party is in default;
11. what happens if a party loses capacity or dies; and
12. dispute resolution provisions.

As usual, please contact me if you would like access to any of the content mentioned in this post.

** For the trainspotters, the title of today's post is riffed from the Go Betweens song 'Part company'.

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(all your) Elder** care agreements

One form of legal documentation that is becoming increasingly prevalent is contractual arrangements between children and their parents where those children are providing support to their parents.

Most commonly, the agreements set out the exact legal basis on which support is provided, whether it be direct financial support (such as paying expenses), indirect financial support (for example, providing accommodation without seeking reimbursement of expenses) or in kind support (for example, caring services).

A comprehensive agreement will deal with a range of matters, many of which can potentially lead to later litigation if not appropriately addressed.

Examples include:

1. agreed financial values for all support provided;
2. the timeframe over which support will be provided;
3. legal ownership of any jointly acquired assets;
4. impact on the entitlements of each child under their parents’ estate plan;
5. principal and interest repayment terms in relation to any loans that may have been made;
6. consequences of death or incapacity;
7. consequences of any relationship breakdowns (for example, the divorce or separation of a child who is a primary carer of a parent);
8. consequences of any relationship breakdown between the relevant child and the parent;
9. dispute resolution provisions; and
10. consequences of termination (including potentially compensation for any foregone opportunities).

Ideally, although arguably not strictly required in a legal sense, the parties to this style of agreement should include all family members, particularly those who might otherwise have different expectations as to what they might receive pursuant to the estate plan for the parents.

** For the trainspotters, the title of today's post is riffed from the Go Betweens song 'Ask'.

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Is there anything (stepchildren) can do** to challenge an estate?

Like many areas of the law, the ability for a disgruntled beneficiary to challenge the provisions of an estate plan depends on a range of factors, not least of which the state where the willmaker lived.

This is because each Australian jurisdiction continues to have unique rules in relation to succession legislation, and in particular, the rules that regulate the ability for eligible beneficiaries to make an application for further provision.

What is consistent in each jurisdiction is that there are rules regulating the category of persons who have standing to bring an application.

One stark example in this regard relates to the ability for stepchildren to challenge a deceased estate.

In broad terms, there are three different regimes that apply.

In summary, these are as follows:

1. if the stepchild is wholly or partly dependent on their step parent prior to the date of death, then in South Australia, Western Australia, Australian Capital Territory, New South Wales and the Northern Territory, the stepchild may have standing;
2. if a moral responsibility can be demonstrated, then in Victoria a stepchild may have standing; and
3. so long as the natural parent and the step parent are married at the date of death, then the stepchild would automatically have standing in Queensland.

In Tasmania, stepchildren have no ability to challenge their step parent’s estate.

** For the trainspotters, the title of today's post is riffed from the Go Betweens song ‘Was there anything I could do’. View here: