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  • Alarm bells should sound for solicitors instructed in intra-family transactions.
  • Particular care needs to be taken when the transaction involves assets passing from an older person to a family member for less than full valuable consideration.
  • Avoid conflicts and ensure that each party obtains independent legal advice.

Increasingly, solicitors find themselves uncomfortably in the frame when an older person enters into a transaction that benefits a family member, often an adult child. Where, in earlier times, a gift for the advancement of a child might not have raised an eyebrow, as awareness grows of the prevalence of elder abuse in the community, solicitors need to be alert to the potential issues with intra-family transactions.

Wardle v Wardle

The recent decision of Wardle v Wardle [2021] NSWSC 1529 highlights some of the pitfalls for solicitors. This case involved a daughter who moved into her mother’s house to care for her following a leg amputation. After five years, the mother’s care needs increased to the point where she needed to move into an aged care facility. At that time she had a number of physical ailments as well as a diagnosis of dementia. The mother and daughter agreed the mother’s house would be sold and the proceeds of sale used to acquire a house in the daughter’s name.

Mother and daughter engaged a solicitor to act in relation to the sale and purchase. The solicitor was advised that the mother had mild dementia and he arranged to visit her in hospital where she was at that time an inpatient. He assessed the mother’s capacity and was satisfied she had a clear appreciation and understanding of the Appointment of Enduring Guardian he had prepared for her to sign, and that she had good insight into her health conditions and the decisions she was making.

At the end of the meeting she told the solicitor she wanted her daughter to have the proceeds of sale of the property to buy a property for herself. She told the solicitor she had a son, and that he had been given a house by her late husband. The solicitor was conscious of the relationship between the mother and daughter and wanted to ensure that the decision to fund the purchase of the property by the daughter was the mother’s decision and did not result from undue influence. He therefore prepared a document setting out what he understood to be the mother’s wishes, for her to sign.

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