In 2008 Helen and John built their dream home on the NSW Coast. They dreamed of early retirement but their assets were a little short so Mary, John’s mother then aged 73 made their dream possible by selling the family home in a country town and contributing $200,000 to their purchase. There was no written agreement and Helen and John registered the property in their names as joint tenants.
At the time of purchase Mary was recently widowed. John’s only sibling, Martha was living and working in South America. Martha was not consulted but it was agreed that Mary would have a home with Helen and John, in a dedicated granny flat.
John said to Mary at that time that upon her death he would pay Martha $100,000. Nothing was documented.
About 10 years later, Martha returned to Australia. She had been injured in a bus accident and was in constant pain and financial stress. She had never married nor had children. She had no ability to work and was homeless. John paid her airfare to return to Australia but she was experiencing depression and her relationship with Helen soured and Helen asked her to leave the home where she had stayed for six months.
Mary wanted to help her daughter but had very little financial resources and was dependent on the pension. Martha was not welcome in the home. Helen and John were unable and unwilling in the circumstances to make further financial contributions to Martha. If the home was sold, all four occupants would be disadvantaged.
Mary, now 84 wanted to maintain her family relationships and her home. She was very distressed and felt unable to brooch her concerns for fear of the likely outfall. She spoke with her priest who referred her to the Elder Mediation Service.
Two mediators met with Mary and subsequently approached John who was also keen to resolve the family problem. Interviews with John and Helen, Martha and John’s son and only child, Dave were held. Subsequently a joint family conference was convened. The priest attended as a support person for Mary. A number of possible solutions were identified and Martha produced medical reports explaining the effects of her condition.
Dave was studying in a large regional town. The family agreed that Dave would move to a two bedroom unit where Martha could share with him. Rents were less expensive here and John and Helen were assisting him with cost of accommodation in any event. Once Martha was able to get a pension she could contribute to the rent.
It was agreed that by the time Dave’s studies were complete, in 3 years time Helen and John would sell the home, downsize and pay Mary a sum proportionate to her contribution. She could use this to house herself and assist Martha. It was also agreed that these arrangements were to be documented by a lawyer and all the parties would make wills to support their agreement. Helen and John and Mary would have independent advice.
The process itself took about 2 days over several weeks. As Mary was visually impaired the mediators met her at home.
Legal costs were restricted to preparation of documents. The costs of the mediation were under $6,000 and the family agreed to share these. Later, John’s lawyer advised that had Mary taken the matter to Court it was likely that the house would have been sold by order of the Court and Mary paid her contribution plus interest. The legal costs would far have exceeded the costs of the documentation and mediation. The case may not have been heard for some time, and in the waiting the family relationship would likely have been shattered and Martha would have been homeless.
Before coming to the family conference and at the suggestion of the mediators, John and Helen and Mary all received legal advice. Mary’s grandson Dave was invited to participate. Marsha was encouraged to ascertain her entitlement to social services.
A family crisis was averted.
Mary felt that her wishes were heard and respected. She felt her family had a reinvigorated closeness and her anxiety was relieved. She was now 85 but very active.
Marsha felt that her health issues were understood and accepted by her brother and sister in law and hoped to be a housekeeper for her nephew with whom she was on very good terms. She said she was happy that she would be independent and she felt useful again and able to use her pension and rent allowance to help in a small way with the cost of his student housing.
Helen and John were able to take the time they needed to maximise the return on their property and Helen was spared the difficulty of sharing her home with her invalid sister- in- law.
John was delighted that Marsha and Helen were again on speaking terms and pleased to know that Mary had been able to communicate her concerns clearly. He now recognised the importance of legal documentation re his arrangement with his mother and his estate.
Dave was a medical student on good terms with his aunt and the move to a unit was attractive to him and to his parents who were financing his full board. He was pleased that he would have somewhere quieter to study where he could bring his friends and still not have the worry of preparing meals and too many household tasks. He could also now spend holidays with his parents as Marsha would not be using his room.
The family agreed to seek further mediation if circumstances changed.
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