The following article is content from our partner Caxton Legal Centre. It does not constitute legal advice, and if you have a specific legal problem, you should consult a professional legal advisor.
Vanessa sought assistance from Caxton Legal Centre after she lent money to her daughter Amanda and Amanda’s partner Brian to purchase a business. The relationship between Vanessa, Amanda, and Brian had broken down.
Amanda and Brian were making the repayments to Vanessa until the economy worsened shortly before the Covid-19 pandemic. They ceased repayments and would not tell Vanessa when they would recommence repayments. They also threatened that Vanessa could not do anything about them not making repayments, as their assets were tied up in trusts.
The more documented and the more detailed the material, the easier to resolve most disputes—so write receipts, make copies of letters and keep everything.
Caxton Legal Centre’s social worker provided support and our lawyer provided advice to Vanessa about her options to recover her money.
In the case of a loan, legal action can be taken to get the money back if it is not repaid. When money passes between family members, it can sometimes be hard to prove that it is a loan and not a gift. In providing a loan, written documentation is very important. To recover loaned money, legal action must be started within six (6) years from the first date that repayment of the full amount could be demanded. When there is no agreement about when and how the loan will be repaid, the six-year time limit starts from the date that the money is handed over.
Unfortunately, most disputes arise when there is little written documentation. These disputes are difficult to resolve. The more documented and the more detailed the material, the easier to resolve most disputes—so write receipts, make copies of letters and keep everything. Seek URGENT legal advice from a solicitor.
Questions to ask yourself when gifting or loaning money:
- How will the gift or loan affect my relationship with the recipient and other members of my family?
- Can my relationship with the family member or friend withstand the possibility that they may not repay the money?
- Is the loan in writing?
- Does the written document have the legal effect I intend?
- Do I also need to speak to my accountant or financial adviser?
Caxton Legal Centre offers a range of services including the Seniors Legal and Support Service, which offers legal and social work assistance for elder abuse, and the Financial Protections Service employing a community worker.
The Financial Protections Service is a free service in Queensland for individuals who are thinking about later life and want to chat about financial decisions that need to be made, or about concerns they have about how to protect their finances.