LPLC continues to receive claims arising from practitioners acting in intra-family transfers.
These claims often involve older members of a family wanting to gift either their property or the proceeds of sale of their property to younger family members on the basis that the older person can live with the family member for the rest of their lives. The practitioner ends up acting for all parties and allegations are later made that proper advice was not given on the consequences of the gift.
The major mistakes lawyers make in these claims are:
- failing to given any advice because it looked like the parties had worked out what they wanted and did not want advice
- where advice is given, failing to keep good documentary evidence of the advice
- acting for all parties resulting in a failure to give adequate independent advice to each party.
Practitioners should be careful not to be lulled into a false sense of security that because the parties are related there will not be a problem. The same professional rigour and objectivity should be applied in these situations as for other clients and matter types. In particular, practitioners are reminded to:
- adhere to usual client selection and file opening protocols
- distinguish the interests of the relevant parties and avoid acting for multiple parties with different interests
- undertake all appropriate searches
- give considered advice which is appropriately communicated and properly documented
- undertake all filings, registrations and other steps necessary to complete the matter.
To assist practitioners manage these risks and avoid possible claims LPLC has conducted seminars and published resources highlighting the potential difficulties of acting in intra-family transfer scenarios. Those resources can be accessed below.