Article by Manny Wood published in the Coffs Coast News Of The Area on 30 June 2023.
Nancy and Don have been happily married for 45 years. Don loves the Blues, but after a recent loss, he threw his beloved mascot teddy-bear at the TV and dislocated his shoulder. He now needs assistance with his day-to-day living.
As Don is somewhat incapacitated, Nancy decides to sell the family home. Amanda, their eldest daughter, offers for Don and Nancy to live with her, but they are reluctant as Amanda has a large, loud family and limited space.
During a family dinner, they all agree that Amanda should purchase a larger property that has a residence for Amanda’s family and a separate smaller dwelling for Don and Nancy to live in. Don and Nancy are happy with this arrangement.
Don and Nancy sell their property but are now concerned that they might lose their pension, as they plan to contribute $500,000 towards the purchase of Amanda’s new property, which Centrelink may deem to be a gift.
Fortunately, they seek legal advice and Don and Nancy are advised that if the parties enter-into a compliant “granny flat” agreement that permits Don and Nancy’s contribution to the new house to be regarded as their primary place of residence, they can keep their pension. Their solicitor drafts the agreement.
The agreement grants Don and Nancy the right to occupy the smaller dwelling for life. It states the proportions that the parties will contribute to outgoings such as electricity, water charges, rates and insurance.
The agreement also addresses how the parties will deal with the termination of the arrangement, which may involve a desire to relocate or the ultimate death of the parties.
These types of arrangements can take many different forms. Legal and financial advice should be obtained early, which will vary depending on the circumstances surrounding the particular transaction and the wishes of the parties involved.
Thank you to Anthony Fogarty for his assistance with this column. Email Manny Wood, principal solicitor at TB Law at manny@tblaw.net.au or call him on (02) 66 487 487. This column is only accurate at today’s date and cannot be relied upon as legal advice.
