IN BRIEF


Your par­ents give you and your spouse some mon­ey – say, to buy a house. Then you split up. To what extent will your spouse get the ben­e­fit of the gift?


When a rela­tion­ship breaks up, the mat­ri­mo­ni­al prop­er­ty may need to be divid­ed between the par­ties. The court will go through the fol­low­ing steps:

  1. deter­min­ing whether it is appro­pri­ate to make an order divid­ing the prop­er­ty at all;

  2. iden­ti­fy­ing and valu­ing the assets, lia­bil­i­ties and finan­cial resources (oth­er­wise known as the pool” or mat­ri­mo­ni­al property”);

  3. assess­ing each par­ty’s con­tri­bu­tion to the pool;

  4. assess­ing each par­ty’s future needs;

  5. deter­min­ing what is just and equi­table in all the circumstances.

Parental gifts are an issue at step 3 – when assess­ing each par­ty’s con­tri­bu­tion to the pool.

One of the fac­tors the Court will con­sid­er is the direct or indi­rect finan­cial con­tri­bu­tion made by or on behalf of a par­ty to the mar­riage to the acqui­si­tion, con­ser­va­tion or improve­ment of mat­ri­mo­ni­al prop­er­ty.

Parental gifts are finan­cial con­tri­bu­tions made on behalf of…whom? You alone? Or you and your spouse jointly?

Some­times it’s dif­fi­cult to tell. Par­ents do not always have clear inten­tions about whether the gift is intend­ed for you alone, or you and your spouse togeth­er. The waters are fur­ther mud­died because, in almost all cas­es, your spouse will inevitably receive some indi­rect ben­e­fit from the gift (e.g. liv­ing in the gift­ed home, or pay­ing less on the mort­gage) – even if it was intend­ed for you alone. 

In most cas­es, the Court will assume that your par­ents intend­ed the gift to go to you alone. There­fore, the gift will be count­ed as your con­tri­bu­tion to the mar­riage. This does­n’t nec­es­sar­i­ly mean that you will keep the house” – but it will cer­tain­ly work in your favour.

If your spouse wants to argue that the gift should be count­ed as a joint con­tri­bu­tion, he/​she will need to pro­vide evi­dence that your par­ents intend­ed to give the gift to both par­ties. This is dif­fi­cult to prove, but has been suc­cess­ful in some cas­es (for instance, where the gift is in recog­ni­tion of both par­ties’ ser­vice to one par­ty’s parents).

The fact that the prop­er­ty is reg­is­tered in the name of one or both par­ties is not deter­mi­na­tive. The Court has wide pow­ers to alter prop­er­ty inter­ests and order the trans­fer of prop­er­ty between the par­ties.


What does this mean for me?

If your par­ents pro­vide a finan­cial gift, it’s bet­ter for you if they pro­vide it to you alone. Of course, this is ulti­mate­ly a deci­sion for your par­ents, not you.

If you are the oth­er par­ty, and your spouse’s par­ents pro­vide a finan­cial gift, you may wish to seek some clar­i­fi­ca­tion about who exact­ly the gift is intend­ed for. If it’s intend­ed for both par­ties, it’s prefer­able to get that in writing.

Ulti­mate­ly, the best way to quar­an­tine cer­tain assets from the mat­ri­mo­ni­al pool is to enter into a bind­ing finan­cial agree­ment. This can be done before or dur­ing the mar­riage, and pro­vides far more cer­tain­ty for every­one involved.


To speak to one of our Fam­i­ly Law spe­cial­ists, please contact:

If you would like to repub­lish this arti­cle, it is gen­er­al­ly approved, but pri­or to doing so please con­tact the Mar­ket­ing team at marketing@​swaab.​com.​au. This arti­cle is not legal advice and the views and com­ments are of a gen­er­al nature only. This arti­cle is not to be relied upon in sub­sti­tu­tion for detailed legal advice.

Publications

Work­place Rela­tion­ships: The Legal Posi­tion (Cold­play Con­cert Edition)

The recent sto­ry of col­leagues (a Chief Exec­u­tive Offi­cer and Chief Peo­ple Offi­cer (CPO)) whose appar­ent rela­tion­ship was cap­tured on…

Dis­missal for Dissent?

The recent unfair dis­missal deci­sion of the Fair Work Com­mis­sion, Shaun Turn­er v Dare­bin City Coun­cil [2025] FWC 1763, in which Deputy…

Con­struc­tion con­tract time­frames and their inter­ac­tion with the NSW Secu­ri­ty of Pay­ment legislation.

Mark Glynn, Con­struc­tion Part­ner at Swaab con­sid­ers the recent deci­sion of Shar­vain Facades Pty Ltd (Admin­is­tra­tors Appoint­ed) v Roberts Co (NSW)…

In the News

Press Release | New Spe­cial Coun­sel Appoint­ment — Peter Bournas

Peter brings more than 20 years of senior legal and prop­er­ty exper­tise, span­ning pri­vate prac­tice, in-house roles with­in the air­port sec­tor…

Michael Byrnes appeared on Break­fast with Tim Web­ster on 2SM on 23 July 2025 to dis­cuss work­place rela­tion­ships and that Cold­play concert

Michael Byrnes appeared on Break­fast with Tim Web­ster on 2SM on 23 July 2025 to dis­cuss work­place rela­tion­ships and that…

Michael Byrnes is quot­ed in the arti­cle, Cold­play con­tro­ver­sy expos­es HR vul­ner­a­bil­i­ty in lead­er­ship rela­tion­ships”, pub­lished in HR Leader on 23 July 2025

Michael Byrnes is quot­ed in the arti­cle, ​“Cold­play con­tro­ver­sy expos­es HR vul­ner­a­bil­i­ty in lead­er­ship rela­tion­ships”, pub­lished in HR Leader on…

Sign up for our Newsletter

*Mandatory information