Family Law Q&A-How does the Court treat money given to me from my parents?

Family Law Q&A-How does the Court treat money given to me from my parents?

Money given by a parent or family member is treated differently in Family Law property settlement depending on whether the money was given as a gift or a loan.

  • If the money is a loan, it is included as a liability on the Family Law balance sheet which is owed by one party to their family member. This is often the most beneficial for the party who is asserting that there was a loan as they will be compensated for the totality of the loan.
  • If the money is a gift which was made to one party then it is a factor that will be considered when assessing that parties financial contributions to the asset pool and an adjustment to the division of assets will be made in favor of that party. This party receiving the gift would be compensated but less so than if it was categories as a loan.

Often one party will claim that the ‘loan’ was intended as a gift, with no expectation of repayment, while the other party will claim that the ‘loan’ was genuine and required to be repaid.

Loans made by family members are often undocumented and legally unenforceable or are made in circumstances where there is no expectation of repayment.

In these circumstances, the Court will often disregard or discount the liability from the property pool but will instead treat the loan as a gift

In order to ensure that a genuine family loan is included in the asset pool, it is important that evidence be put before the Court to prove that there is a genuine expectation of repayment.

Evidence of this nature can include but is not limited to:

  • A formal loan agreement
  • A registered mortgage over property owned by the parties;
  • evidence of the lenders/borrowers as to the terms agreed, intentions and time frames for repayment, etc;
  • evidence of repayments being made;


Has this article triggered questions regarding your own Family Law matter? Contact Solari and Stock Miranda on 8525 2700 or click here to request an appointment with one of our Family Law team.

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