The Ex-Files: Jeremy Sutton - How to protect expensive gifts to your child in the event of a relationship breakup

Young love can put valuable assets at risk. Photo / Getty Images

Q: My daughter wants to buy an electric vehicle (EV) to obtain the government subsidy. But she cannot afford to do this without family support. I am also keen to buy her a new jetski for her 21st birthday. Finally, I want to give her original art pieces. She has had a partner for more than 18 months, but the other person was at university in another city. Since lockdown they have moved in with them and it has got serious. They haven't lived in the same city for more than six months. What can I do to protect her, and the family, should she split up with her partner?

Jeremy Sutton: The law makes a presumption that any partner is entitled to share equally in the family home, family chattels in any other relationship property after a period of three years.

If you were to financially provide for her in buying the EV, that would become relationship property after she had been in a relationship for three years.

De facto factors

First, you need to consider when the de facto relationship has begun. There is guidance from the Property (Relationships) Act 1976 as to relevant factors that are to be included.

It lists factors that may be relevant, but there could be other matters of importance not included.

The family court can decide to take equal weight or more for some factors. Normally, the court will be looking at whether there has been commitment and permanency between them. Have they undertaken mutual holidays with their families?

My experience has been that the court will normally look at some factors as having disproportionate weight. Because your daughter and her partner have only lived together for six months, that will not mean that the relationship will only be for that period.

It can be hard to determine when a de facto relationship has begun (and moved on from dating) in these circumstances.

They could be found to be in a de facto relationship when living in different cities during the lockdown.

It would also be important whether they have been introduced to each other's families and there has been some financial closeness. The extent of communication including phone calls, text messaging, gifts and emails would also be considered.

Family chattels

Most vehicles depreciate over time and are perhaps less likely to need to be protected. Cars are frequently bought and sold over a lifetime and therefore it is hard to protect against all future vehicles for the EV purchase.

Most vehicles fall under the family chattels. Photo / Getty Images

The jetski is another item that will depreciate over time. Personally, I would rather not try to protect the family here.

The jetski is a depreciable asset that could be sold easily.

It is normally considered a family chattel that will not be valued highly in any relationship property split. The value of a chattel for relationship property purposes is normally the market value at separation and not the usually higher insurance value.

However, if you were to help your son in the purchase of a house in the future, real property does not tend to appreciate and therefore in that case I would suggest a loan agreement or some other financial document to protect you and the family.

The pieces of art

This is a distinct category from the EV and the jetski. Art often does increase in value over time and is not sold for the duration of the relationship. My experience is that the value and ownership of artwork can be contentious at the end of a relationship.

You could consider asking your daughter to either execute a contracting out or prenuptial agreement with her partner or you could loan the painting to them while retaining ownership.

Legal documents

I favour formal documentation being drawn up by a family lawyer to acknowledge that the art continues to be owned by you both.

The partner of your daughter is more likely to be sympathetic to you wanting to retain the art within your family.

There could be some other financial arrangement your lawyer could recommend. Best of luck to you.

Summary

It is good you are wanting to help your daughter out. It is best for your daughter to start early to establish financial expectations in the relationship particularly in respect of those items that come from your family.

• Jeremy Sutton is a senior family lawyer. Specialising in divorce cases where there are significant assets, including family trust and complex business structures.