In a real estate comparison, the family court can treat a parent`s payments to their child in two ways: clients often believe that all “loans” are treated the same at the time of divorce. We know that is not the case. Can you explain the difference between “hard” and “flexible” loans for our readers? In the absence of a written loan agreement, a balding statement from a party exposing the bare bones of the transaction, although the authorized evidence is 12, is generally not sufficient to rebut the presumption of progress. The evidence of the client`s evidence, which argues the existence of the loan, should, first, the circumstances of the parties` intention to create legal relations and, secondly, the conditions that are compatible with a loan contract, namely that the money advanced by the parent to the child was to be repaid, the obligation to repay being the fundamental characteristic of a loan.13 You can also choose whether the debt on your death can be forgiven by the creation of a supplementary will (which we can also help you). Otherwise, the loan will be maintained because of your estate. If money was a loan, not a gift, and it went into a property, for example, money for a new kitchen, the crucial question would be – was the intention behind that loan to “get the money back at some point,” or to have a share of the house and therefore an investment? Depending on the intention, there are very different legal principles to apply. If the intention of the loan was to create part of the property, then the lender must be included in the procedure. This also leads to an increase in legal fees. It is important to respect the proportionality of legal fees that may need to be spent in relation to the amount in question. They will certainly not be treated the same by the court.
The case law has helped clarify the situation and “flexible” loans are unlikely to be considered unless they are supported by a legal intention to repay the loan. A good example of “severe” credit/debt is a debt to the bank or a credit card in which the lender will sue in civil court if repayments are not maintained. On the other hand, a “soft” credit/debt is, for example, a credit from a close family member or friend whose borrower is unlikely to run out with the lender who will likely wait for the payment of the money. A loan of a sum of money is linked to the fact that the money is borrowed by the parents to repay that money with or without interest. Children and their spouses are expected to be reimbursed in accordance with the agreement with the parents. Parents have the option of formally declaring their interest in the property their children acquire with the borrowed amount. This can be taken into account either by hosting a mortgage or by a restriction on the property. However, it will be a long time before the Tribunal reaches a certain conclusion that the assistance previously granted by a third party will continue indefinitely, beyond a final hearing, to the extent that it can be invoked in the Tribunal`s decision-making process. Economically stronger spouses are expected to support the weaker spouse and are normally asked to do so, rather than being able to argue that the other spouse should be supported by the family. The court should ensure that credit assistance/money gifts continue.