Episode Details

In today's question-and-answer episode, I chat with Ken Raiss, director of Metropole Wealth Advisory, who shares his knowledge of property and wealth management.

We're going to discuss three of your questions about how to help your children into property, including questions about how to stop your children from squandering their inheritance and what happens to your superannuation when you die.

Even if you don't have children yet, I think you're going to benefit from some of the pearls of wisdom Ken drops.

Q&A Day with Ken Raiss

Question: We are in the fortunate position to have paid off our home and have a number of investment properties, but now our children having difficulty getting into the property market, in part because it's hard for them to save a sufficient deposit to buy the type of home they're wanting. What's the best way of helping our children into property?

There are three major strategies to achieve the desired outcome of helping your children into property.

1. A deposit gift – Some parents are gifting their adult children enough funds to cover a part or all of the deposit to buy a property and then their children remain responsible for the bank loan.
   1. The property in these circumstances is owned by the child and is subject to all the normal issues with asset protection.
   2. Some clients support their children by guaranteeing a higher loan and so do not actually pass over any funds.

i. However, they must be very careful as in the event of a default you would be liable for the full loan and could lose any security you may have given, such as your family home.

ii. Parents should try to limit any guarantee to the minimum amount required and when the property grows in value sufficiently arrange for a refinance so that they can be removed as guarantors.

2. Buying for a minor – Another strategy is purchasing a property for a minor in their name with the proper notations on the title.
   1. Parents will be the child's legal personal representative and will have the responsibility of managing the property.

i. When the minor becomes an adult, parents will need to take a copy of the birth certificate and evide