Suing a family member can be avoided
The saddest types of legal battles are those which involve our family members.
People often associate a family dispute with divorce, dividing up the property or working out where the children will live after separation but I’ve noticed another type of matter emerging more often in recent years.
Sadly I am seeing an increase in disputes between family members which occur as a result of disputes over money. People think that ‘blood is thicker than water’, that their family members can be trusted without question and that there is no need to document their agreements.
Here are some recent examples which could have been avoided by family members properly documenting their agreements:
- An elderly couple allow their daughter and her de facto to live in a property that they own, and build an extension on the property. The elderly couple need to sell the property to fund a move into a retirement village. The daughter and de facto do not have sufficient funds to purchase the home and want to be reimbursed for the money they have spent on the property. The daughter and de facto refuse to leave the property.
- Parents loan a sum of money to one of their children for a business venture. The parents need the money to be repaid and ask for it to be returned and the child refuses to repay it saying that it was a gift because the parent had given gifts to their other children.
- A mother is in business with her daughter. The daughter and the mother incur debts while running the business. The business agreement is not in writing. The daughter dies and the son-in-law, who is administering the estate of the daughter, disputes that some of the debts are the responsibility of his late wife.
- A couple ask an uncle to do building works with no written agreement. A dispute arises about the cost of the works.
- Two cousins run a business together. There is no agreement in writing. They both have access to the business accounts and draw on the bank accounts whenever either of them needs money. A dispute arises as to the amount of money that one cousin has drawn out. The cousin who has drawn out more money says that he is entitled to as he has worked more hours than the other cousin.
And the list goes on…
Blood may be thicker than water, but there is still a need to document your agreements with family members. The cases above could have been avoided or been less costly if the family members had communicated better and put documents in place rather than suing a family member. Rather than showing a lack of trust in your loved ones, documenting your wishes may protect your relationships, while maintaining your emotional and financial security.
For further information, please contact the Commercial Litigation Team.