Case study: asset protection for your children


We have acted for this husband and wife a number of times. Recently, their adult son, who is still single and forging himself an impressive career, has signed a Contract to buy a property worth over $1M.

Our husband and wife clients have decided to contribute about $350,000 to his purchase.

They want to protect their investment, and protect him, from a future spouse making a claim on this new property he’s buying. Luckily, they contacted us before the property had settled, which gave us more options to explore.


Option 1: change the purchase in the Contract to a family trust instead of buying it in their son’s name. We explored this option, but because the property is going to be the son’s principle place of residence, using a trust was not the best option. There were also other control issues, so we ruled that out.

Option 2: have our husband and wife client added onto the Title as purchasers, along with their son. This was not ideal for our clients because they already had investments properties, and this would add to their land tax. Also, it would complicate their estate planning, and their son’s planning too.

Option 3: record the $350,000 as a conditional loan given to the son, rather than a gift. The bank doesn’t need to know about the loan – we will register a caveat after the purchase has happened and the bank has already registered their mortgage. This loan will reduce the equity in the property, and secure our clients’ investment in their son’s purchase. They can always forgive the loan later, but at this time, it protects at least their investment from a future spouse of their son.

 We decided on option 3.


TBA Law offers high quality legal services in estate planning and asset protection.

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