There are many families where parents continue to generously provide their adult children, and their families, ongoing financial support. This may be in the form of paying for expenses, cash gifts or repeated interest-free loans.
These funds may not be repayable as a loan, however, while these funds will likely be recognised as a financial contribution by one part, they may also be considered to be a financial resource available to one party which is not available to the other, and could be considered as a factor to reduce property settlement entitlements when considering a party’s “future needs”.
In other words, if a person is considered likely to be well looked after into the future by their parents, this may be sufficient to reduce the percentage of overall entitlements of that person, particularly if the other party does not have any kind of similar future potential support.
It is often too late, after a separation, to re-write history and for a parent, after a long period of providing generous financial support to a child, to then “cut them off” and say this is going to stop to prevent this being a factor relevant in that child’s property settlement.
There are ways to treat ongoing financial support for a child along the way to minimise the risk of this negatively impacting that child’s property settlement entitlements in the event of separation. How to do so will often depend on the source of the financial assistance and how it is being received.
Professional advisers and commercial and family law specialist lawyers will be able to provide this important advice to ensure the benefit of ongoing financial support is retained by their child.
