Verbal agreements around the kitchen table – such as those cited in the case of pop star Vanessa Amorosi – are just some of the triggers. This is how to avoid them.
Versions of pop star Vanessa Amorosi’s bitter legal battle with her mother in the Supreme Court of Victoria are playing out in courtrooms across the country as family members dispute property deals, wills and informal agreements.
Different recollections of “Bank of Mum and Dad” loans, rows within blended families about who owns what, children’s inheritance impatience and the rights of adult children living at home are increasingly being settled in court, say lawyers.
“Amorosi’s case does not solely sit with the rich and famous,” says Lachlan McKenzie, practice leader with lawyers’ Moores, about disputed family property deals decided years ago around a kitchen table. “We see these disagreements popping up a lot.”
Amorosi, who rose to stardom with the hit song Absolutely Everybody, is suing her mother, Joyleen Robinson, over the ownership of two properties held in separate trusts – one in Narre Warren, an outer Melbourne suburb, and the other in the US where she lives.
Vanessa Amorosi leaves the Supreme Court of Victoria. Aaron Francis
In addition to dividing families, the legal expenses of a dispute can escalate quickly – with daily appearance fees for a senior barrister averaging around $10,000, plus additional costs from junior counsel and solicitors, expert witness fees, court charges and paperwork.
Susan Bonnici, senior counsel with Burke Lawyers, adds: “Families dealing with the purchase, transfer or ownership of real estate need to be mindful that relationships and needs are constantly changing. Failure to plan for this could have catastrophic financial consequences for you or your loved ones.”
Lawyers say the following situations cause the most stress, and advise how to avoid problems.
About 40 per centaged 25 to 34 are considering turning to the Bank of Mum and Dad to help buy a home, according to a recent report by the Australian Housing and Urban Research Institute.
Craig Hollett, a director of Solomon Hollett Lawyers, says: “Parents considering providing help need to be very clear on whether they are providing a gift or a loan to their children.”
Parents providing a gift do not expect to be repaid, or have any interest in their children’s property, he clarifies.
Strategies include:
McKenzie says many family disputes about real estate are caused by a reliance on conversations that members “walk away from with conflicting beliefs about what was agreed”.
“It only takes one element, such as a family death or divorce, to throw a verbal agreement into uncertainty,” he says. “These disputes often come to the fore many years later, so the fallibility of memory often compounds the issue.”
Strategies include:
“There is no doubt that blended families have more disputes than traditional families,” says Darryl Browne, principal of Browne Linkenbagh Legal Services.
“That’s because there are split allegiances between a spouse’s new partner and children from an earlier relationship. Compared to earlier generations, there are more assets to argue about because many people have significant interests in superannuation funds and real estate prices in many parts of Australia have increased greatly,” Browne says.
People over 65 are under increasing pressure from their children and relatives to provide financial support through gifts. Simon Letch
The number of families with dependent children in blended families has slightly decreased to around 4 per cent over the past five years, according to analysis by the Australian Institute of Family Affairs.
“There is no magic solution,” says Browne about heading off potential property disputes, particularly when it comes to estate planning.
Strategies include:
Susan Bonnici urges both parties to seek legal and financial guidance when families are considering financial help in return for a granny flat on their children’s property. Louis Trerise
People over 65 are under increasing pressure from their children and relatives to provide financial support through gifts, loans or accelerating payment of inheritance, according to Bonnici.
“Property prices are sky-high and a lot of wealth is tied up in homes owned by elderly parents. They are often pressured by their children to transfer the family home and move into aged care,” she says.
In 1970, the average adult wage was about $4100 and the average Sydney house cost $18,700, according to government statistics. This year the average job in Sydney pays around $96,000 and houses are about $1.5 million, statistics show.
Strategies include:
Anna Hacker, client director for Pitcher Partners Advisory, says detailed, clear instructions are the key to successful transfers of property.
This often involves discussing estate plans with beneficiaries before finalising the will and, in some cases, creating a family charter – this is not legally binding but can reduce the potential for conflict.
“Part of succession planning is putting in place rules of play,” says Hacker. “A written charter can help everyone come together and identify potential problem issues, rather than hope they do not exist. It can also put in place a dispute resolution mechanism to resolve disagreements.”
Strategies include:
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