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Loans from Mum,
gifts from Dad.

Strong advocacy, right by your side.

As a society, the Bank of Mum and Dad is providing more money, more often to their children than ever before where many marriages are ending in divorce.


If a relationship has come to an end, ambiguities and arguments about how money advanced from a parent is to be classified is to be expected. If you are separated or just thinking of getting separated, we advise you to obtain advice on how to navigate your next steps, understand your rights and obligations and enter into an agreement to divide your assets and liabilities with confidence.


If you remain in a relationship, we strongly recommend that you formalise any loans received from family and friends as soon as possible to avoid such a situation in the future. Nobody dreams of the division and disagreements that can arise when everything is good!

Like a stitch in time, it is helpful to speak to an experienced separation lawyer before things get worse. Whether you want to understand your rights before the law or ensure that you receive a fair share of the asset pool, we can help you.


Let us help you today.

I just wished if I could have started my journey with Joshua, things

would have been a [lot] less painful.

... stop wasting your valuable time and money with other Law firms.


~ direct quote from another satisfied client.

Feel unsure about what to do next?

DG Family Law will assist you to characterise your assets correctly and finalise your property settlement without delay, hidden costs or complicated language. You can rest assured that we have dealt with many complicated and difficult property matters, including negotiating investment properties, loans from parents, businesses and family trusts.


In determining whether money that has been advanced is a loan or a gift, the Court will consider the following factors:

Whether there is any proof that the money was provided and that the other party knew of the money (?);

Whether or not the money was provided by a single payment or by multiple small payments (?);

Whether or not the agreement was recorded in writing? If so, how formal was the document (?);

Whether or not an interest rate was set for the money that was given to the parties (?);

Whether or not regular repayments were made by the parties (?);

Whether or not there was a verbal understanding that characterised the money given as a loan or a gift (?);
Whether or not other siblings or family members also received the gifts or the loans (?);

Whether or not the parents have any alternative legal means of redress if the parties in receipt were not separating (?); and

Whether or not the parties adopted a course of action that was consistent with the gift/ loan classification asserted (?).

If the above circumstances apply to you, we encourage you to reach out today for a no obligation chat with a family lawyer.

Practice Areas


How do we secure our loan money?

There are many things that can be done to ensure that money advanced to a family member is clearly given with clear understandings of its purpose between all parties'.

A written agreement outlining the intention of the parties, any repayment schedules, interest to be charged and any other details should be signed by all parties before money is transferred.


The terms of this agreement must be followed and clear records kept if they are to be considered binding for family law purposes.

Further, it is recommended that the parties register the loan agreement by lodging a caveat or a mortgage against the title of the parties' home.


It is recommended that all parties obtain independent legal advice prior to money being advanced. It may be advantageous for the parties to enter into a Binding Financial Agreement at the time of recieving the money to clearly define the intentions of the parties and each parties' rights.


In order to avoid the presumption of advacement, it will need to be formally documented as a loan agreement. This process is alsohelpful to determine repayment schedules, interest repayments and other details.

It is helpful for all parties to document payments made, interest accrued and other such calculations to ensure that there is an evidence trail in the event of a dispute.

Many people forget to communicate the arrangements for such a loan to the broader family, which can lead to many stressful conversations if a parent prematurely passes.

Further to the above, you want to ensure that there is a paper trail of you receiving payments, following up on overdue payments and you keeping the overall repayment amounts up to date.


You can apply to the Court for a property settlement at any time, although you must file proceedings within 12 months of a divorce or 24 months of a de facto relationship ending.



What is the law in relation to loans?

When parties apply to the Family Law Court for property orders, the court will consider the assets, liabilities and superannuation interests of both parties to the relationship.

If there is an unsecured, undocumented debt from one of the parties parents, the Family Law Courts will typically presume that the money advanced was in fact a gift unless there is persuasive evidence to the contrary to be considered. Further, the Court will look for evidence that the "loan" is repayable and is likely to be repaid into the future.


It is worth noting that similar considerations will be considered for director's drawings from a company, gifting assets to the other spouse or transferring assets to a third party where one spouse contests the transfer. It is important for the parties to resolve these conflicts, as they can engender significant impacts of the proposed division of the asset pool.

The Family Law Courts have discretion to decide on the classification of the money advanced.

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