As a parent, you want to be able to help your children financially and give them the best possible head start in life. But it is also necessary to safeguard your own financial well-being. Stacks can help you put legal structures in place that protect your financial situation and that of your children, no matter what the future may bring.
Of course, as a parent you want what is best for your children. With current superannuation laws and rising house prices, as well as other financial burdens that your children may face, such as relationship breakdowns, you may wish to consider how you can help them financially.
But before leaping in with financial assistance, there are some important issues that you should first consider. Safeguarding your own financial well-being is crucial.
You must decide whether the financial assistance you are providing is a gift or a loan. This is very important. For example, if the money is a gift, then it will form part of your child’s matrimonial assets if he/she is married. These assets could then be divided up by the court if your child’s relationship breaks down, which may not be in your child’s best interests. A carefully documented loan, on the other hand, would be treated quite differently by the courts.
A member of the Stacks wealth protection team can provide specialist advice about the matters to consider before providing financial assistance to your child, and if required, draw up a loan agreement that caters to your unique situation.