Lending Money to Family: The Tricky Business of Family transactions with DA Family Lawyers
If there’s one thing which A Current Affair or Judge Judy should have taught us – it’s that money and family don’t mix
Most family members would think that lending money to a sibling or relative is not such a big deal. However, studies show that family break-ups are predominantly caused by money disputes. In these cases it is most common that the borrowing party has either not returned money owed and refuses to or in other cases a family member may believe they are entitled to a sum of money which another relative legally owns.
Money is a tricky thing to deal with no matter whether the person you’re dealing with is blood or a stranger. In order to assist you with family money disputes DA Family Lawyers have constructed a few guidelines to make your transaction a happy one or to, at the very least provide a security blanket if you do end up needing to go to court.
1. Always, ALWAYS draw up a contract with a lawyer
At DA Lawyers located in Brisbane we deal with family disputes on a daily, even hourly basis so you should never underestimate what a family member might do. If you’re going to enter into an agreement with a family member of $3,000 or more we would always suggest that you get a legally binding contract drawn up by one of our lawyers. This will provide you with a safety net if anything does go wrong and will always assure that you can take them to court if it comes down to it.
2. If you want to say no, say NO!
Often younger family members will approach older members if they have a potential business venture they want to get off the ground, or if their dream house has suddenly come on the market for a “bargain price!”. In these situations the older member’s gut feeling can be to say no and move in, but unfortunately they often ignore this feeling as they fear damaging the relationship.
DA Family Lawyers understands that saying the n word to family members can be hard, however you must think of the implications if your deal goes awry. You may be helping your relationship in the long run as if you say ‘NO’ now as your son or daughter etc. may not talk to you for a few weeks. This may seem like a long time but if you compare it to what a court battle could do to your relationship it’s nothing.
3. Be aware of their financial situation
While most families are quite close, some family members like grandparents can be quite unaware of their grandchildren’s lives despite being so closely related in blood. It is always wise to ask other family members of the person asking for money’s job prospects, employment history and lending/borrowing history. This will ensure that your investment is a little more premeditated and secure.
4. Bite the bullet and go to court
In the event that your arrangement does fail, for large amounts of money you should always go to court. We know that it is an unimaginable scenario – to see yourself taking your relative to court – but you have to remember that it is sometimes the only option. If your relative has borrowed a large sum of money and have taken months or even years to pay you back a dime then you have grounds to go to court. DA Family Lawyers are happy to help you with all legal matters and advise on the best route of conduct to achieve the most beneficial results – getting your money back while doing your best to maintain the relationship.