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Case File #39: The Informal Loan
The Divorce Subsidy
John 'lent' his daughter $150,000 to help her buy a home. It was a family favor; no interest, no contract. He assumed if she ever sold the house, he’d get his money back.
When the daughter’s marriage collapsed three years later, the Family Court stepped in. John claimed the $150,000 was a debt. The ex-husband’s lawyer argued it was a 'gift,' invoking the 'Presumption of Advancement.' Without a written loan agreement and a registered caveat, the court agreed. The $150,000 was treated as part of the couple’s equity. John’s hard-earned cash was split 50/50, effectively subsidizing his ex-son-in-law’s new life.
- Clinical Mystery: Why did a sister lose her home because of her brother’s business loan?
- The Human Intent: To provide a 'limited' guarantee for a sibling's business without reading the 'All Monies' clause
- The Diagnosis: The Guarantee Creep: A 'small' favor often attaches to all your personal assets by default
