Mum and Dad, if you wish to gift property, or cash to a child it is extremely important to obtain legal advice. 

A lot of family law matters these days involve gifts of money or property from parents to their children.  This is often refereed to as the “Bank of Mum and Dad” stepping in to help. 

In these difficult economic times, and with the price of property reaching new record heights (although there has been a slowing of the property market more recently) children more than ever may need a helping hand to enter the property market.

What happens to your gift, or Transfer if your child later separates from their partner?

In the event of a breakdown in your child’s relationship with their partner, it is important to protect your gift of cash and or property.  This ensures that your child benefits from your generosity not your child’s estranged partner.

Here are a few suggestions to secure your investment:


  1. If transferring property, ensure that your child is the only registered proprietor or go on Title with your child yourself (although this may attract Stamp Duty).  Then it would be essential for your child and their partner to enter into Binding Financial Agreement, at the time the transfer is made.  This Agreement will quarantine the asset from the estranged partner.
  2. Register a Mortgage over the property, stating that in the event their relationship breakdown you may be able to retain the property. The Mortgage should be accompanied by a Loan Agreement, stating that the loan is payable in a certain period.
  3. Alternatively, you could ask your child to sign a Charge, which would then give you the right to lodge a Caveat over the property (this is like a padlock on the title, and you hold the key).
  4. All the above

Monetary Gifts

  1. When making gifts of money we would suggest that, at least, you have a solicitor draw up a Loan Agreement, with proper commercial terms.  The loan may need to be called upon at some stage to claw back the monetary gift in the event the relationship breaks down.  If the relationships remains in place, then it is up to you when and if you call in the loan.
  2. Ensure that your Child enters into a Binding Financial Agreement, that references the payment made by you.
  3. All the above.

Generally speaking, if your child contributes a property, and or a monetary gift to a relationship, this is deemed by the Family Court as being a “financial Contribution” to the relationship, made by your child.  The reason for this is that the property and or monetary gift has come into the relationship from your child’s family, i.e., you!

For the reasons outlined above it is very important to document any transfer, or monetary gift, in particular legal documents.

For more information on transferring/gifting property or money to a family member, please book an appointment with us today or contact our Family Law team at Tonkin Legal Group on (03) 9435 9044.