A granny flat arrangement is a lifechanging and lifelong commitment. Consider the implications of undertaking such an arrangement.
Understand how the arrangement works and what you need to think about before entering into such an agreement. There are legal and financial implications for such an agreement.
Getting sound legal and financial advice before entering into this agreement will ensure all parties, particularly the older person, are protected.
In this episode:
Resources mentioned
Connect with Nick Donnelly
Connect with Coral Wilkinson:
More about Your Aged Care Compass podcast:
Are you supporting an older loved one at home and ready to give up because it’s just too hard? Your Aged Care Compass is aimed at anyone who is caring for an older loved one who still lives at home and is wondering what support is available to them.
We're Coral and Michelle, the sisters behind our business, See Me Aged Care Navigators.
Coral is a registered nurse with over 30 years’ experience in both health and aged care. A former assessor with the aged care assessment team, an advocate and author, there’s not much Coral doesn’t know about Australia’s aged care system.
Michelle is a former pharmacist with over 30 years in the public health and private sectors of pharmacy. Michelle is now client care manager for our business.
Our story started as one of supporting our parents to remain in their own home, to be as independent as possible and remain connected to their community. We reached a point however, of needing extra support and we achieved this because we know Australia’s aged care system so well, we knew what programs could assist us and our parents.
This podcast, Your Aged Care Compass, brings together not only our personal experience in supporting our own ageing parents but also our vast professional experience in supporting other families to keep their loved ones at home.
We will help you makes sense of Australia’s aged care system, from your first contact with My Aged Care through to the different funding streams and assessment workforces, management options for home care packages and extra funding that people might be eligible for.
There's so much more. Topics relating to dementia and legal and financial considerations will be covered, as well as real life stories of where it went wrong for people and how we guided them to get it right.
Your Aged Care Compass will guide you clearly and compassionately to the right support at the right time for your ageing parents and loved ones.
Like what you hear? Please leave us a Rating and Review. We’d love you to share this podcast with any friends or family who have older loved ones.
Hi everyone.
2
:It's great to have you back for our
next episode of Your Aged Care Compass.
3
:Today, I'm talking with Nick Donnelly.
4
:Nick is a specialist in elder financial
advice, partnering with families to make
5
:decisions with them and not for them,
concerning the transition to residential
6
:aged care and retirement villages,
in addition to managing home care and
7
:other elder financial arrangements,
including granny flat arrangements.
8
:Navigating Australia's aged care
framework alone is incredibly difficult.
9
:However, working together, Nick helps
break down jargon and acronyms, aiding
10
:decision making and removing the
stress and anxiety associated with the
11
:complexity of elder financial advice.
12
:Nick, welcome.
13
:It's great to have you
join the podcast today.
14
:Tell us a little bit about what you do.
15
:Who are the people who typically
come to you seeking advice?
16
:Is it the older person themselves
or the adult children on
17
:behalf of their aging parents?
18
:Nick: Thanks, Carl.
19
:Thanks very much for, for having me.
20
:So, I think, you know, you described
it pretty well, a lot of , the type
21
:of work that We did with your intro
there, but I mean, I guess at a high
22
:level, elder financial advice is really
about, creating tailor made solutions,
23
:practical solutions, just to give older
people and their families certainty and
24
:peace of mind when they're just trying
to navigate, a significant lifestyle
25
:change, such as aged care, granny
flats, home care, retirement villages.
26
:That's how I describe older advice.
27
:I'm typically approached
as a by a family unit.
28
:I suppose is the best way to describe it.
29
:So it will generally be an elder
and potentially their partner
30
:and their adult Children.
31
:Or 1 elder and 2 or 3 adult Children.
32
:Or it could be 2 elders that are both
looking to maybe going to age care or a
33
:granified agreement and 1 adult child.
34
:Lots of different combinations.
35
:And.
36
:Like most things with this type of
advice, the complexity increases
37
:with a bigger family dynamic.
38
:But in nearly all cases, it's
a family unit that, that is
39
:approaching me for my help.
40
:Coral: Excellent.
41
:We tend to see the same and it does
add a little bit of complexity when the
42
:whole family unit comes, but , I think
it's a positive thing as well, because
43
:in teasing out those solutions, you,
can get that whole family unit on the
44
:same page and everybody's understanding
and working towards the same goal.
45
:Nick: That's right.
46
:.
Coral: So look, I was just going to say today.
47
:I really like this topic.
48
:We're talking about
granny flat arrangements.
49
:So, you know, what does that mean, Nick?
50
:Nick: A granny flat arrangement.
51
:At a very, very high level is a
piece of social security legislation.
52
:What it really is, is a recognition
of family arrangements that will help
53
:provide support for older people.
54
:Residential aged care is
extremely expensive for both the
55
:individual and the government.
56
:And.
57
:We are going to increasingly see, in
my opinion, more arrangements of this
58
:nature allowing people to stay at home to
sort of essentially lower that cost for
59
:both the government and the individual.
60
:But also from, a lifestyle perspective,
living with your family being taken care
61
:of I feel will have far better outcomes
than being in residential aged care.
62
:Don't get me wrong, there are people
that will get to a point where their
63
:care needs mean they need more care and
that will mean residential aged care.
64
:But there's this gap between
someone that needs a little
65
:bit of help and a lot of help.
66
:And often these people are ending
up in residential aged care
67
:where they may not need to.
68
:And this is where a granite
flat arrangement comes into it.
69
:So essentially, it's an exchange
of assets between the elder.
70
:And we'll call the other party, the adult
child, because typically these adult
71
:children, although in saying that the
granny flat legislation doesn't actually
72
:have tests for family relationships.
73
:So it could be a mom and a daughter, or it
could be a auntie and a niece or a nephew.
74
:So it is flexible in the sense that it
doesn't have to be that direct mother,
75
:father, daughter, son, sort of dynamic.
76
:So really you creating a multi
generational arrangement.
77
:With this exchange of assets the exchange
means that the adult child will receive
78
:assets from mum or dad, let's call
it, and in exchange the adult child
79
:will be required to provide care for
their mum or dad for the rest of their
80
:lives or until the arrangement ends.
81
:Coral: it's something , we are
seeing more and more of , as well.
82
:So, in your line of work, and we're
seeing it in ours where the motivation
83
:is the older person wants to stay in
their own home for as long as possible.
84
:And the, adult children or
the family that can Do this
85
:that's what they want to do.
86
:So they will gosh, we've had three
clients in the past two weeks , who
87
:had different kinds of grant.
88
:Well, I don't know that they've got granny
flat arrangements, but they've either
89
:brought mom and dad into their own home or
they've moved into mom and dad's home, or
90
:they've built a granny flat out the back.
91
:And I guess, , that's to
do with lifestyle choices.
92
:So look, Nick, I wanted to ask you what
is a granny flat arrangement and what are
93
:some typical arrangements that you see?
94
:Nick: Yeah, look, the
name itself is confusing.
95
:As we mentioned before we started,
granny flat, people's minds
96
:immediately think house with
separate structure in the backyard.
97
:And that is a granny flat.
98
:And that's more of real estate
definition of what a granny flat is.
99
:Yeah.
100
:In the typical ranches that we see, it
can be that it can be a structure where
101
:you've got a family home and a granny
flat may be built in the backyard.
102
:Perfect.
103
:That can work really, really well
because everyone is close by.
104
:So everyone can keep an eye on each other.
105
:So the care can be provided.
106
:But it also allows the elder to
retain their independence because
107
:quite often they might be moving
from their own home, which they've
108
:lived in for 30 40 50 years time.
109
:Mhm.
110
:Moving in to a family home together
can quite take quite an adjustment.
111
:So that is a good arrangement.
112
:It can work well, but it
doesn't have to be that.
113
:So it could be a case of the
adult child moves into the older
114
:person's home or the elder person
moves into the adult child's home.
115
:So that is an option as well.
116
:It could also be a case where
the adult child and the elder.
117
:Combine their finances to purchase a
home, they might build a home that's
118
:absolutely perfect for the flexibility
and the upside of that is that you can
119
:really tailor a property to what you need.
120
:Whereas if you're purchasing a property
elsewhere, an existing property in the
121
:absence of significant renovations, which
is also an option you've kind of got to
122
:deal with what properties are available.
123
:So it could be purchasing
existing home or.
124
:Combining finances to
construct your own home.
125
:, there's no real stipulation.
126
:Again, it comes back to the exchange
of assets for provision of care.
127
:That's the big part of it.
128
:And , living together is the best way
to make sure they're taken care of.
129
:Coral: That's really interesting
when I think of granny flat, I
130
:automatically think of standalone
building in the backyard.
131
:So really interesting that there are
these kind of variations on that as well.
132
:Nick: Yep,
133
:Coral: Nick , is this a formal process
like ideally, would require documentation
134
:and legal input, like, how does it work?
135
:Yeah.
136
:Yep.
137
:Nick: Now, purely from, we'll talk about
the Centrelink implications, I'm sure, in
138
:a little while, but the Centrelink upsides
or the benefits they don't actually
139
:require a legal agreement to be drafted.
140
:So Centrelink will accept the granny
flat arrangement and the benefits
141
:for both parties in the absence
of an actual formal agreement.
142
:So , that's part of the legislation.
143
:However, in saying that, I would
never ever nor would any elder, elder
144
:law specialist, lawyer recommend
that someone goes into a granny
145
:flat agreement without consent.
146
:Having it formal without creating a
legal arrangement because at the end
147
:of the day, the person who has the
most to lose is the elder because
148
:once they do give those assets away,
those assets no longer belong to them.
149
:So they have a huge amount to lose
because the adult child then really
150
:has, I suppose, the control and in
the past, the reason why we always
151
:encourage a range is because there were
situations, elder abuse, which we'll
152
:probably talk about in a little while
too, where mum or dad might transfer.
153
:a property or ex assets to an adult
child and it doesn't work out because
154
:the adult child gets a new partner or
they have to move overseas or interstate.
155
:And mum or dad can be out on their ear
having lost the vast majority of their
156
:assets and essentially be destitute.
157
:So, that alone is the main reason
to have a formal arrangement.
158
:So that the elder has recourse in
the event that things don't work
159
:because it's complex, it's involved,
there's a lot to think about, and
160
:there are a lot of things to go wrong.
161
:And people tend to have very short
memories, three, five years down the
162
:line when things aren't working out.
163
:So, having both people seeking
independent legal advice.
164
:Is generally what we would recommend.
165
:So normally the process would be,
it's a needs assessment first.
166
:So someone might listen to this podcast
and say, you know what, that's something
167
:that could work really well for us.
168
:Should we think about that?
169
:From that point, you would go to a
lawyer and get legal advice to say,
170
:Because a lawyer is the one that's
going to draft this agreement.
171
:The lawyer would sit down in a
room, ideally with all parties, so
172
:it might be with the elder and the
adult children, and also the adult
173
:children that may not be involved.
174
:Because there are, there could be
other siblings, and often there are.
175
:And this type of arrangement
has, estate planning implications
176
:too, which we'll talk about.
177
:Once the legal advice is yes, guys,
I think this is something that
178
:could work really well for you.
179
:You need to seek financial advice
to make sure this is going to work.
180
:So that would be approaching
someone like myself.
181
:So I'd work hand in hand with the lawyer
about creating the agreement, refining it.
182
:And then from my side, making
sure that financially it's
183
:going to work for both parties.
184
:Cause there's no point setting
up a granny flat arrangement.
185
:And the older person, yes, they've got
care and accommodation, but if they have
186
:no money to continue to live their life,
it's probably not the best outcome.
187
:Coral: Yeah.
188
:Yeah.
189
:Nick: If once the draft agreement is
prepared and everyone's comfortable
190
:, the document is executed and then
it's launched with Centrelink
191
:and essentially the granny fund
arrangement is then in place.
192
:So the obligations on both sides, the
assets transfer the agreement of care and
193
:you have a granny fund agreement created.
194
:Coral: Fantastic.
195
:Gosh.
196
:So, you just mentioned Centrelink
assessment and implications.
197
:Can you just expand on that
a little bit further for us,
198
:Nick: Yeah, yeah, absolutely.
199
:I mean, this is one of the key parts of
a granified agreement has got to work
200
:both financially and non financially.
201
:And one of the big financial
benefits is Centrelink.
202
:So Centrelink has something called
deprivation rules, also known as gifting.
203
:Essentially, you can't have a million
dollars in your bank account, turn
204
:around, give you a million dollars away
to daughter, son, charity, whatever,
205
:then turn around to Centrelink and
say, can I have my full pension
206
:Coral: Sure.
207
:Yes.
208
:Nick: So that's called the deprivation.
209
:And essentially they're saying that
if you deprive yourself of assets to
210
:gain benefit by receiving a higher
pension, they do not allow that, which
211
:makes sense because the people that get
the pension should be the people that
212
:need it, not the people that have the
assets and they're trying to sort of.
213
:deviate away from it.
214
:Now, there are concessions,
very small ones.
215
:You can give 10, 000 per year, no more
than 30, 000 in a five year period.
216
:So that gives people flexibility.
217
:They might want to give 10, 000
to a granddaughter or grandson
218
:for a deposit for a house or
a car or help them with uni.
219
:So the government wants to help people a
little bit, but not too much to the point
220
:where people can take advantage of it.
221
:Now, with a granny flat agreement, those
deprivation rules are not eliminated
222
:entirely, but given that you'll be
potentially buying a house or constructing
223
:a house, the proceeds or the money that
the elder will give to the adult child are
224
:typically exempt from the Centrelink asset
testing when it comes to determining if
225
:you will or will not receive an pension.
226
:Because this is the key thing as well
saying before, if you give these assets
227
:away and then you lose your pension,
well, the older person has the most to
228
:lose and all of a sudden they've, they've
lost the most because they've lost the
229
:pension, they've lost their assets, they
don't have a lot of options anymore.
230
:So, comes back as well
to my point earlier that.
231
:The government will prefer the
people age in place but they know
232
:they can only age in place if it
makes financial sense as well.
233
:So, allowing these concessions for
giving higher and over and above those
234
:limits I mentioned before allows people
to keep their pension when they're
235
:creating this type of arrangement.
236
:Coral: Nick, what are some practical
realities of granny flat arrangements?
237
:Nick: Granny Flannery
Arrangement is a, is a.
238
:Life changing and lifelong commitment.
239
:So be prepared.
240
:that is top of the rule.
241
:I always said this to
people in my first meetings.
242
:I say, well, look, if the situation
rose could I move in with my.
243
:75 year old dad tomorrow and think
it's just going to go swimmingly.
244
:Probably not right off,
right off the outset.
245
:I
246
:Coral: Probably not.
247
:Nick: that's a difficult proposition,
but again, some people find
248
:themselves in this position where
they're balancing their decisions.
249
:I could go into aged care or I
could live with son or daughter.
250
:Now, culturally, this can be a big
thing as well, because there are certain
251
:cultures where the adult children are
obliged to take care of mom and dad.
252
:And this works really well in
this situation because they were
253
:going to be doing this anyway.
254
:Why not take advantage of
the Centrelink entitlements?
255
:And it also gives the ability for adult
children to get onto the property ladder
256
:too, which they may not be able to.
257
:And that's, one of the reasons I see this
being more and more and more prominent
258
:as properties, particularly capital
cities, become more and more out of reach.
259
:This version of transferring assets,
we'll call it an early inheritance
260
:because that's essentially what it is
really can help the adult child as well.
261
:So.
262
:That's the first thing that I'll
say to my clients, and I also need
263
:to always reiterate and remember
that I'm acting on behalf of the
264
:elder, not the adult child, because
the elder is my client, and they're
265
:the ones that has the most to lose.
266
:Because elder abuse , is absolutely rife.
267
:Unfortunately there's this kind of sense
of entitlement, I think, in certain adult
268
:children that inheritance is theirs now.
269
:Not later.
270
:See, we have to really
be conscious of that.
271
:And a lot of that comes down
to experience in meetings.
272
:If you're sitting there in a meeting
and the adult child is doing all the
273
:talking and mum or dad sitting quietly
in the corner, not saying anything,
274
:they're the situations that concern me.
275
:And the lawyer will have
had this meeting as well.
276
:So we'll talk together and
say, how was your interactions?
277
:What did you think of X, Y, Z?
278
:So that's a really
important consideration.
279
:Things like, can the elder
ask for the assets back?
280
:Well, not really.
281
:Because you've assigned
those to your adult child.
282
:There's that's something
to think about as well.
283
:Once these are gone, they're gone.
284
:Can the adult child ask the elder
to move out if it's not working?
285
:Well, Not necessarily.
286
:It will say in the agreement, the
standard of care and the standard of
287
:accommodation that is legally required.
288
:So, you want mum or dad to move
out because you're moving into
289
:state, they must come with you.
290
:This is the big thing as well, that people
when they, they may not think that far
291
:ahead, they think great, getting myself
on the property ladder, but if their
292
:job takes them to Adelaide or Perth or
something like that, On a regular basis
293
:or even permanently, you got to think
about mom and dad because your obligations
294
:don't stop just because of that.
295
:You got to manage your be
conscious of lifestyle changes.
296
:Now, some lifestyle changes.
297
:We can't anticipate family
dynamic is a big consideration.
298
:What if, I'm single, mum or dad comes
and lives with me, but then I get a
299
:partner in six or twelve months time.
300
:Partner doesn't like mum or dad too much.
301
:Encroaching on our life, I don't
really like this arrangement.
302
:they're the kinds of challenges
that can make these agreements
303
:difficult to continue.
304
:But if you say to people at the start,
these specific examples, how will
305
:you deal with this, is this possible?
306
:Getting all these things out
on the table helps clients
307
:make more informed decisions.
308
:Coral: I love that, Nick.
309
:I think as you've said a couple of
times, it's the older person who's at
310
:risk here and it's a big risk, isn't it?
311
:And we all set out with the best of
intentions of having mum or dad or
312
:both move in with this or us move
in, but We don't tend to look two,
313
:three, five years down the track and
consider all those variables that
314
:might make that situation, challenging.
315
:So
316
:Nick: Yep.
317
:Coral: I think these conversations
that you're having with people, , it's
318
:vital , to help them, make the right
decision and certainly be aware.
319
:That things might change a little bit
in another year or two or later, and you
320
:need to be thinking about that now as
you're entering into this arrangement
321
:and not trying to backtrack and, deal
with it when it's become really.
322
:Challenging and uncomfortable at home.
323
:Nick: That's right.
324
:, my job quite often , is to hope for
the best, but plan for the worst.
325
:Coral: Yeah,
326
:Nick: And when you say to people,
look, this is what could happen and
327
:, this is where it will leave things.
328
:It makes people, not second
guess or reconsider, but it's
329
:just being conscious of it.
330
:because it can be very easy to
mom or dad says, great, I don't
331
:have to go to a nursing home.
332
:Final daughter is going
to take care of me.
333
:Fantastic.
334
:Adult child goes fantastic.
335
:I can now buy a house
for my family to live in.
336
:This is great.
337
:So when those two things can often
cloud or paper over what could go wrong.
338
:Because these are big decisions.
339
:These are for both sides.
340
:I was saying before, there's
a life changing and lifelong
341
:decisions and absolutely they are.
342
:And it might sound like I'm being
pessimistic about it, but I'm certainly
343
:not, because it could be fantastic,
particularly from an intergenerational
344
:point of view, because you can have
three generations living together which
345
:is great because you could have elder,
adult child, and then son or daughter.
346
:So you can have three
generations together.
347
:So it can work really, really well.
348
:It's just, everyone has to be conscious
of you don't know what you don't know.
349
:Um,
350
:so estate planning is something
that people need to be
351
:really conscious of as well.
352
:I mentioned extended
families and complexity too.
353
:So let's say hypothetically, you've
got, the older mom or dad, and
354
:you've got three adult children.
355
:One of those children is going to
enter into the granny flat agreement.
356
:Remembering that once those assets are
transferred to that one adult child, they
357
:are their assets then and will no longer
form part of the elder's estate when
358
:they eventually pass the same before.
359
:And you were saying it as well as better
to have everyone in the room because
360
:People could find that, okay, well, if
son A is getting 500, 000 now and there's
361
:going to be nothing left in the estate,
that could lead, in the absence of a full
362
:transparency across the whole family,
that could lead to some complexity when
363
:the estate is finally being distributed
because there could be nothing in there.
364
:So, it acts as an early inheritance.
365
:But by default, it actually acts
as a disinheritance tool as well.
366
:That's what people need to be aware of.
367
:Now, for the older person,
they're going to be dead, so it
368
:might not bother them too much.
369
:But again, the last thing you'd ever
want is, hundreds of thousands of
370
:dollars being, chewed up in legal fees.
371
:for something that
could have been avoided.
372
:There's ways to mitigate this.
373
:But again, , people don't like those
types of nasty surprises as well.
374
:So estate planning is a really important
consideration and the lawyer that creates
375
:the agreement will almost inevitably
talk about estate planning as part of it.
376
:So it's something that I'd discuss
too, but a very important aspect.
377
:Coral: yeah, . I can imagine
those kind of conversations around
378
:this particular point and siblings
who thought they were getting an
379
:inheritance and now they're not.
380
:Nick: Surprise.
381
:Coral: yeah.
382
:Yeah.
383
:how would you end a
granny flat arrangement?
384
:Right.
385
:Nick: the legal agreement will
actually go through the specific
386
:factors that detail how it can end.
387
:But the primary ones are
death on either side.
388
:Aged care is a big one because obviously
going to a granny flat agreement
389
:means you have increasing care needs.
390
:And They're going to age care made to the
granny flat agreement will end because
391
:you no longer have to provide care for the
older because I'll be taking care of that.
392
:This is a really, really big one.
393
:When we talk about Centrelink.
394
:If you create a granny flat agreement
tomorrow, hypothetically and then the
395
:older goes into age care anytime within
those first five years, Centrelink can
396
:look back and say, Hey, You potentially
could have reasonably foreseen the granny
397
:flat agreement was going to end because
the care needs were at a point where
398
:aged care would be required in five
years and they can actually claw back
399
:what benefits you may have received,
but in terms of keeping your pension.
400
:So that's, that's a
really, really big one.
401
:And people need to be aware of that.
402
:My approach is.
403
:Before you sign this agreement, you go to
a doctor and you say, look, can you please
404
:put down in writing that there's nothing.
405
:In front of you as far as my health is
concerned, that would indicate I need
406
:age care in the next five years because
that evidence that's what you're going
407
:to give to Centrelink if they start
pushing back if you try and do that
408
:three or four years later, it's too late.
409
:So you need people need to be very aware
of this because it essentially it's
410
:to avoid people taking advantage of.
411
:Hypothetically, I'm an adult child.
412
:I know mom's going to
aged care in six months.
413
:Let's give all your money.
414
:You'll keep your pension.
415
:Well, I've got my money.
416
:Now you're in aged care.
417
:I don't really care.
418
:It's to avoid that type
of thing happening.
419
:And the cost of aged care is
something that I talk about
420
:as well with all my clients.
421
:And we build into this agreement because
, if they've given away all their assets,
422
:how are they going to pay for aged care?
423
:So we make sure that in conjunction
talking with our lawyer who is working on
424
:it, we always make sure there's a clause
in there that says in the event that
425
:age care is required at any point, you
adult child will fund all of those costs.
426
:Coral: Yes.
427
:Nick: And it sort of can catch
people a little bit off guard because
428
:they think, Oh, well, that means I
might have to re mortgage my house.
429
:Absolutely.
430
:It might mean you need to do that.
431
:But that is the nature of , this
arrangement that you need to be
432
:aware because we're just trying
to plan what might happen.
433
:Cause you don't want nasty
surprises down the line.
434
:Well, mum's in aged care.
435
:If that isn't in the contract.
436
:adult child doesn't necessarily
have to cover those costs.
437
:So there's also comes back to who's
the client who has the most to lose.
438
:It's the elder.
439
:Yeah.
440
:Coral: That was a great discussion.
441
:I was completely unaware of that.
442
:Nick: It's a big
443
:Coral: love talking to you,
Nick, because I always learn
444
:something every time we chat.
445
:Nick: Great.
446
:Coral: And I know our
listeners will as well.
447
:, Nick: the other way can answer it.
448
:I got sidetracked about aged
care, but you can mutually
449
:end the agreement as well.
450
:If both parties want to go.
451
:And generally the agreement will have an
independent arbiter that will decide that.
452
:If we end this now, what's
it going to look like?
453
:Who walks away with what?
454
:So the agreements always have
an independent person there.
455
:So it can be a mutual agreement.
456
:But you can't walk away from
it without dealing with the
457
:implications that it would clearly
state you've received these assets.
458
:You can't walk away.
459
:Otherwise, you got to give them back.
460
:Coral: I am hearing very loudly and
very clearly that it is essential
461
:to get professional advice before
you decide that you're going to move
462
:mum and dad in with you or move in
with them or build a granny flat.
463
:Like, It's a lot more complex than just
making that decision with the best of
464
:intentions because it does have all these
unseen ramifications that might pop up,
465
:12 months or whenever down the track.
466
:And if you're not aware of this, , what
we've just discussed and moving
467
:into residential aged care, big
implications potentially for a family
468
:who have gone into this without an
awareness of what it really means.
469
:Nick: Yeah, absolutely.
470
:That's right.
471
:And it's about, as I said, I mean, I sound
like a broken record, but you know, hoping
472
:for the best and planning for the worst
is, how you approach it because you're,
473
:as I said, financial and non financial
considerations, both equally important.
474
:Coral: Yeah.
475
:Yeah.
476
:Nick.
477
:I always like to hear about real stories.
478
:So , are you able to tell us about someone
who built a granny flat or entered into
479
:this kind of arrangement to support their
elderly parents and because they didn't
480
:understand, that there were these things
they needed to consider what went wrong.
481
:Nick: I think, in touch wood, I haven't
had many that have gone wrong, and I
482
:think that probably comes down to a lot
of the things we've spoken about today.
483
:If you carved all of that out and
said, go and see a lawyer, I'll
484
:write some financial advice for you,
we sign away and off you go, and we
485
:haven't discussed all of these things,
that's when I think families could
486
:get themselves into a little bit of
trouble because they're not aware of it.
487
:So I think probably that's the key.
488
:You know, The preparedness of the
advisor, the preparedness of the
489
:lawyer to run people through this has
probably led to mostly good results.
490
:The one that I have had is that I had
an individual where they've moved in
491
:together into the adult child's house.
492
:And mom has given a reasonable
amount of money to that 250, 000.
493
:To the daughter who she's put on to her
mortgage now mom still had some money
494
:left over and she decided that she wanted
to give more money to her daughter to
495
:help eliminate her mortgage entirely.
496
:I said, look, that's
that's perfectly fine.
497
:You can do that, but you need to be
aware that you are now you will now
498
:have no assets whatsoever and because.
499
:There are gifting limits.
500
:You can't absolutely give absolutely
everything away and it's a complex
501
:way that Centrelink calculate.
502
:I'm not going to go into it today.
503
:But I sort of warned her at the time.
504
:I said, look, you're not going
to be able to keep the pension.
505
:I'm happy that your daughter's
not going to have a mortgage.
506
:But, in a couple of years time,
you won't have many assets left.
507
:You had a little bit of cash
to deposit, things like that.
508
:But since we're exhausted And
she has, she approached me and
509
:was really, really concerned.
510
:It was that she's not going
to have a pension because
511
:she's running out of money.
512
:And I said, look, this is you.
513
:We were trying to trying
to tick off two goals here.
514
:You having enough money for
the rest of your life and your
515
:daughter not having a mortgage.
516
:We got the second goal ticked,
but like many elders, they look
517
:after their children more than
they look after themselves.
518
:So that was the situation where, I,
again, I did sort of make it clear that
519
:this is where we might find ourselves.
520
:But again, In someone's
own mind, this is the goal.
521
:That's what they're focusing.
522
:They may not even think of all
those implications, even if you
523
:explain it really clearly to them.
524
:And so it wasn't that that is a, it's,
it's not a, it's not a disappointing
525
:outcome because we can resolve it.
526
:The daughter can give
some of the money back.
527
:That's not a problem.
528
:The door is going to take care of
her regardless, but it was just
529
:the fact that, there are still
limits on what you can give.
530
:You can't just give absolutely
everything away in a lot of situations.
531
:Yeah.
532
:Coral: Nick, fantastic
speaking with you today.
533
:, Nick's contact details are
included in the show notes.
534
:So if you want to follow
up , you certainly can.
535
:, you mentioned elder abuse a couple
of times during our discussion today.
536
:And we're going to be inviting you back
in a couple of weeks , we're bringing in
537
:a lawyer who works in that space as well.
538
:So, listeners, we'll have that coming up
in the next two to three weeks, hopefully.
539
:But for today, thank you for tuning
in and Nick, thank you for joining us.
540
:Nick: You're more than welcome.