Category Asset Protection

When a Family Loan Isn’t a Family Loan: Why Your Loan Agreement and Caveat May Not Save You in a Property Settlement

This article was written by Nancy Wang Principal Solicitor at W & G Lawyers. 

It is one of the most common scenarios in Australian family wealth: parents lend money to an adult child to help buy a home, build a business, or get a foothold in the property market. Sometimes the loan is documented carefully. Sometimes a caveat is even lodged on the title. The family is satisfied that the money is “protected.”

Then the child’s marriage breaks down. The parents expect that their loan will be deducted from the property pool before the assets are divided, leaving more for their child (and, in their minds, less for the departing spouse). They are often shocked to discover that the Family Court treats the loan as if it does not exist.

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Testamentary Trusts

A Smarter Way to Protect and Pass on Wealth

A testamentary trust is one of the most effective estate-planning tools available for protecting assets, managing tax outcomes, and ensuring wealth is used as intended. When carefully structured, it offers flexibility, control, and long-term protection for beneficiaries across generations.

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