litigation question for couple

[Terry_w]

Terry, they haven't thought abt if husband's money is loan or gift. It is just the way they want it to structure....It is surely not loan as there is no agreements between them....only option left is gift....how would they know that husband's is gifting money to partner as part of PPOR.....

Again there is no written agreement of this arrangement to be either gift or loan



can u pls elaborate what u mean by clawback provisions.....is there any specific time frame for to be worry free...

Transfer of money with no indiciation of gift or loan = it could be argued both ways. Risky.

If husband's transfers were used to pay for the PPOR then there would be a direct connection. If money put into an account and that mixed and used to pay PPOR then less of a connection, but still a connection.

Clawback provision on undermarket value transfers see s120 and surrounding sections of the bankruptcy act and also consider state acts..How any transfer will be treated will depend on how and when it was made. Did the transferor know they were becoming insolvent at the time, was there consideration, did they plan to defeat creditors etc etc.

Assuming not insolvent at the time, then any gift within 5 years would be at risk. Anything after 5 years ago less so, but still at risk.

btw, there is a rebutttable presumption of insolvency.

 

[s0805]

Transfer of money with no indiciation of gift or loan = it could be argued both ways. Risky.

If husband's transfers were used to pay for the PPOR then there would be a direct connection. If money put into an account and that mixed and used to pay PPOR then less of a connection, but still a connection.

thanks Terry. Had chat with them today and confirmed that there is no agreement between them....Given the option of loan or gift i think gift is the better option....as loan can be argued to be his money easily.....

From what i get is that even to consider his contribution as gift for PPOR offset(which helps run household costs and savings)...there has to be some sort of agreement between spouses where one spouse is happy to gift his money regularly to pay off the PPOR in other spouse's name....have i got it right?

 

[Terry_w]

thanks Terry. Had chat with them today and confirmed that there is no agreement between them....Given the option of loan or gift i think gift is the better option....as loan can be argued to be his money easily.....

From what i get is that even to consider his contribution as gift for PPOR offset(which helps run household costs and savings)...there has to be some sort of agreement between spouses where one spouse is happy to gift his money regularly to pay off the PPOR in other spouse's name....have i got it right?

Since the transaction has already happened, many times possibly, you can't just later argue it was one or the other - actually you can, but the evidence will need to be produced to back up this claim. A trustee in bankruptcy will probably just make a grab for it and they need to go to court to oppose it or to try to get it back.

 

[s0805]

Since the transaction has already happened, many times possibly, you can't just later argue it was one or the other - actually you can, but the evidence will need to be produced to back up this claim. A trustee in bankruptcy will probably just make a grab for it and they need to go to court to oppose it or to try to get it back.

By Evidence you mean some sort of written agreement between spouses claiming that one spouse's money to other in past as well as in future to be considered as gift only not loan....is it right? i would assume that this agreement will need to be prepared by lawyer or something.....

I wonder how the person who is suing someone can dig this deep to cause an issue of this sort for his partner?

 

[Terry_w]

I was speaking to a trustee in bankruptcy today about a different matter and I brought up the issue of money 'movements'. He said if A transferred money to B they would treat that as a loan in the absence of evidence to the contrary.