WEBVTT - YIMBY! Building in the backyard: the intergenerational breakthrough 0:00:10.880 --> 0:00:14.200 Hello, and welcome to The Australian's Money Puzzle podcast. I'm 0:00:14.280 --> 0:00:18.280 James Kirby. Welcome aboard everybody. If you are watching property 0:00:18.280 --> 0:00:22.640 prices take off around the country, land prices to be precise, really, 0:00:24.000 --> 0:00:27.760 maybe as you're gazing out your back window you might 0:00:27.880 --> 0:00:31.800 be looking at an opportunity right under your nose. My 0:00:32.000 --> 0:00:36.200 guest today is Nathan Fradley, financial advisor from Fradley Advice, 0:00:36.479 --> 0:00:39.000 regular on the show, and we're going to talk about 0:00:40.000 --> 0:00:43.760 this property opportunity which I think has been sort of 0:00:43.920 --> 0:00:46.360 underplayed to some degree, and I'm really interested in what 0:00:46.400 --> 0:00:48.080 he has to say about it because he has been 0:00:48.479 --> 0:00:49.680 involved in it. 0:00:49.760 --> 0:00:52.040 How are you, Nathan, I'm good, James six for having 0:00:52.080 --> 0:00:52.480 on again. 0:00:52.920 --> 0:00:54.520 Great to have you on. I mean, obviously there's a 0:00:54.560 --> 0:00:56.040 couple of other things I want to talk about, but 0:00:56.080 --> 0:00:58.160 I do want to put this up front, if you like, 0:00:58.520 --> 0:01:01.880 just before we do. I've had I think it might 0:01:01.920 --> 0:01:05.880 be one of the questions today from listeners, this ongoing 0:01:06.080 --> 0:01:10.920 suggestion that most advisors, not you, but most financial advisors, 0:01:11.000 --> 0:01:14.039 when you go into them, they just talk about chairs, bonds, 0:01:14.440 --> 0:01:19.759 listed investments, investment platforms, funds they don't like, they don't 0:01:19.840 --> 0:01:23.080 want they are not able, for one way or another, 0:01:23.720 --> 0:01:28.120 to actually advise in any sensible, coherent way on property, 0:01:28.160 --> 0:01:32.360 as we know direct residential property true or false, Nathan Bradley. 0:01:32.840 --> 0:01:35.880 There's there's layers to this, James, And you know I 0:01:35.920 --> 0:01:38.560 loved to be moderate, and you're looking for a headline 0:01:38.560 --> 0:01:39.560 as well, so i'll give you. 0:01:39.600 --> 0:01:42.800 I'll give you desperate for a headline today there is, Yes, 0:01:42.840 --> 0:01:45.160 there's an entire empty newspaper coming out tomorrow. 0:01:46.280 --> 0:01:48.240 I think the first part is to recognize that financial 0:01:48.240 --> 0:01:51.600 advisors are actually only licensed to sell financial products, so 0:01:52.000 --> 0:01:53.120 there is that kind of. 0:01:53.080 --> 0:01:54.000 Restriction in it. 0:01:54.040 --> 0:01:56.920 But I do think there's plenty of advisors out there 0:01:56.920 --> 0:01:59.600 who are more than comfortable to do financial planning and 0:01:59.640 --> 0:02:02.920 incorporate right strategy and property and if they are comfortable 0:02:02.960 --> 0:02:05.880 in doing so, if they licensee or the business they 0:02:05.920 --> 0:02:08.679 work for allows them to. But the other part of 0:02:08.720 --> 0:02:13.760 it is going to be the incentive. And that's always 0:02:13.760 --> 0:02:16.080 been the factor that what we are licensed to provide 0:02:16.120 --> 0:02:20.760 advice on and how we are paid may create a 0:02:20.919 --> 0:02:24.200 difference in how we give advice. Now, there's plenty of 0:02:24.200 --> 0:02:26.840 situations where someone might say, oh, I'd like to buy 0:02:26.880 --> 0:02:29.160 a property, and what they can afford and what makes 0:02:29.160 --> 0:02:32.080 sense doesn't make sense, but I think there is there 0:02:32.120 --> 0:02:34.840 has been, historically, more than now, I would say, a 0:02:34.880 --> 0:02:37.560 tendency to just lean towards things that advisers can charge 0:02:37.560 --> 0:02:41.960 a percentage fe on instead of charging for retirement advice 0:02:42.000 --> 0:02:42.480 as a whole. 0:02:43.120 --> 0:02:45.600 Yeah, And I suppose on one side we have the 0:02:45.600 --> 0:02:47.480 fact that some of them won't give advice. On the 0:02:47.480 --> 0:02:49.280 other side, we have the problem that some of them 0:02:49.320 --> 0:02:52.040 give advice. And that's beautiful to you're alluding to. Okay, 0:02:52.240 --> 0:02:54.920 so on those ones that do, like yourself, So we 0:02:55.040 --> 0:02:58.400 have a I mean, there's obviously this ongoing notion that 0:02:58.440 --> 0:03:02.760 property is expensive, but the chase the property market. Residential 0:03:02.800 --> 0:03:05.000 property market is in very good shape just now, just 0:03:05.040 --> 0:03:08.080 had a very good year. Forecaster for another very strong 0:03:08.160 --> 0:03:12.600 year next year. A lot of demand, strong rental returns, 0:03:12.800 --> 0:03:16.840 virtually zero vacancy rates in many places, capital gains, and 0:03:16.880 --> 0:03:18.960 a lot of this is to do with the value, 0:03:19.000 --> 0:03:23.040 if you like, of residential urban land. One of the 0:03:23.040 --> 0:03:25.080 things that has not been fully explored, it's been a 0:03:25.080 --> 0:03:26.920 while since I even talked about it on the show, 0:03:27.040 --> 0:03:31.160 is densification and the opportunities in that area. I don't 0:03:31.200 --> 0:03:35.280 mean developing, becoming a property developer yourself per se folks. 0:03:35.280 --> 0:03:37.360 But I am talking about whether you are citing on 0:03:37.440 --> 0:03:39.560 a piece of land that could be much better used. 0:03:40.320 --> 0:03:42.120 Have you got a term for this? I know traditionally 0:03:42.160 --> 0:03:44.680 it was granny flats. I think Granni flat's probably too 0:03:44.800 --> 0:03:46.800 narrow these days, is it, Nathan. 0:03:46.800 --> 0:03:51.440 Well, yeah, The Granni flats world is more around transferring 0:03:51.480 --> 0:03:55.600 assets and living somewhere for life, versus the subdivision or 0:03:55.640 --> 0:03:59.640 building the physical Granni flat, which with comes from building 0:03:59.680 --> 0:04:01.440 up these I think there's two parts that as the 0:04:01.440 --> 0:04:04.080 part that says, hey, we've got this space, could we 0:04:05.360 --> 0:04:08.000 drop a tiny home on it, you know something that 0:04:08.360 --> 0:04:11.080 and subject of planning all the other fun stuff and 0:04:11.120 --> 0:04:12.920 get some additional rental board out of it. I think 0:04:12.960 --> 0:04:16.520 that's definitely an opportunity out there. And then there's the 0:04:16.520 --> 0:04:19.000 granny flat other side of that, which is, hey, we've 0:04:19.040 --> 0:04:22.760 got this big house. We've got might be estate planning needs, 0:04:22.760 --> 0:04:25.800 maybe we've got personal care needs, We've got kids that 0:04:26.200 --> 0:04:28.599 need additional support, maybe we spend a lot of time 0:04:28.600 --> 0:04:31.080 with them, they've got a big mortgage, whatever it might be, 0:04:31.640 --> 0:04:34.920 and we are comfortable living together and for whatever is 0:04:34.960 --> 0:04:37.920 in the estate planning and the stars all ALIGNE. Then 0:04:37.960 --> 0:04:40.080 that's kind of this transfer of assets for the right 0:04:40.120 --> 0:04:41.880 to live somewhere, And I think that's going to come 0:04:41.960 --> 0:04:45.440 up a lot as this generational wealth transfer sort of 0:04:45.480 --> 0:04:46.440 story plays out. 0:04:47.440 --> 0:04:49.960 Yes, absolutely, Okay, well let's delve into that. I mean 0:04:50.000 --> 0:04:53.640 there's two parts. Let's do both parts, the intergeneration and notion, 0:04:54.080 --> 0:04:56.880 which is put very simply, like, there's just a scenario 0:04:57.000 --> 0:04:58.760 being that there are two people in the big empty 0:04:58.760 --> 0:05:01.919 house with a large garden back. They have perhaps a 0:05:02.000 --> 0:05:05.320 son or a daughter who is struggling with a family 0:05:05.400 --> 0:05:08.159 in a tiny house, and it's all a bit absurd 0:05:09.400 --> 0:05:13.080 in that scenario. Is there a hypothetical you could put 0:05:13.120 --> 0:05:15.360 forward that would be useful to explore? 0:05:15.560 --> 0:05:17.919 Yeah, So I think the first definition we'd lean on 0:05:17.920 --> 0:05:20.480 as a cendling definition, because that's often where people latch 0:05:20.520 --> 0:05:21.480 onto centlink things. 0:05:21.520 --> 0:05:23.479 So according to center Link, the transfer of. 0:05:23.520 --> 0:05:26.560 Assets, be it a property or cash, for the right 0:05:26.680 --> 0:05:29.520 to live somewhere for the rest of your life constitutes 0:05:29.560 --> 0:05:32.120 a granny flat. So in that instance, we could have 0:05:32.760 --> 0:05:35.839 the parents potentially transfer the house to the kids and 0:05:35.880 --> 0:05:37.560 then they all move in together like parents have the 0:05:37.640 --> 0:05:38.960 right to live there for the rest of their life 0:05:39.279 --> 0:05:42.159 and that transfer happens, or they could sell their house 0:05:42.360 --> 0:05:44.320 and move in with the kids and maybe renovate or 0:05:44.360 --> 0:05:45.960 buy a new house or whatever it is and give 0:05:45.960 --> 0:05:50.599 them assets and those from a senlink perspective, depending on 0:05:50.680 --> 0:05:53.840 how it is done, come with what we call deprivation 0:05:53.960 --> 0:05:57.520 exemptions ie sent link don't assess that money anymore. It's 0:05:57.960 --> 0:05:59.680 not like a gift that you have to assess for 0:05:59.680 --> 0:06:03.000 the next five years. It disappears, So that can have 0:06:03.160 --> 0:06:06.039 really good I suppose outcomes for the right people where 0:06:06.560 --> 0:06:09.000 you've got a situation where you get the co living situation. 0:06:09.480 --> 0:06:13.200 Maybe there's shared responsibilities around taking give grandkids and future 0:06:13.240 --> 0:06:15.719 care responsibilities for the kids to take care of the parents, 0:06:16.360 --> 0:06:18.760 but parents will get to keep their pension, you know, 0:06:18.800 --> 0:06:20.640 the kids get their extra cash and support, maybe a 0:06:20.720 --> 0:06:21.479 reduced mortgage. 0:06:21.520 --> 0:06:22.640 Maybe that have to work as much. 0:06:22.720 --> 0:06:25.480 There's a lot of sort of co benefits in these 0:06:25.520 --> 0:06:27.120 kind of arrangements. 0:06:27.200 --> 0:06:29.520 So for those who are on a pension, who will 0:06:29.600 --> 0:06:31.280 probably be on a pension, which is by the way, 0:06:31.320 --> 0:06:33.560 the majority of Australians right, the majority of students have 0:06:33.680 --> 0:06:36.960 some access to the pension. To retain that access, there's 0:06:37.000 --> 0:06:39.440 certain so tell us how that would work in the 0:06:39.480 --> 0:06:41.279 scenario I've just put forward. 0:06:41.360 --> 0:06:43.080 Yeah, So if you think about I mean the point 0:06:43.080 --> 0:06:46.200 about property made earlier, most Australians hold most of their 0:06:46.200 --> 0:06:48.680 wealth in their property, you know. That's you know, and 0:06:48.720 --> 0:06:50.680 they might be sitting on a you know, on a 0:06:50.680 --> 0:06:53.440 two million dollar house that's unassessed for the age pension, 0:06:54.040 --> 0:06:56.120 and maybe they've got a couple hundred grand it's super 0:06:56.200 --> 0:06:59.800 whatever it might be. That house is currently exempt. If 0:06:59.800 --> 0:07:01.920 they sold it and that money sat in the bank, 0:07:02.040 --> 0:07:07.960 it's now assessed. So I suppose the continuation of that 0:07:08.120 --> 0:07:11.120 is they still live somewhere and centillly going to give 0:07:11.160 --> 0:07:14.800 that exemption to that point. And so there's a few 0:07:14.960 --> 0:07:17.120 sort of curly worthy rules and I won't get too 0:07:17.200 --> 0:07:19.240 heavy into them. Don't do anything until you get vist 0:07:19.240 --> 0:07:21.320 on this one, guys. This is a curly weary one. 0:07:21.520 --> 0:07:25.560 But there is the ability to transfer the property and 0:07:25.840 --> 0:07:27.840 the full value of the property, if done in the 0:07:27.920 --> 0:07:32.320 right way, can be exempt from gifting or from deprivation. 0:07:32.320 --> 0:07:33.160 It's a technical term. 0:07:33.800 --> 0:07:36.080 Or and that could be a ten million door a house, 0:07:36.120 --> 0:07:38.840 mind you, or it could be the sale of the 0:07:38.840 --> 0:07:41.480 property and the transfer of assets and the amount that 0:07:41.560 --> 0:07:45.040 is zempt is calculated based off the youngest party in 0:07:45.080 --> 0:07:48.559 that transaction, the youngest gifter, and basically a life table. 0:07:48.640 --> 0:07:51.000 So there's a series of calculations that are done there. 0:07:52.120 --> 0:07:56.480 Okay, so the couple can actually retain their pension and 0:07:56.560 --> 0:08:01.200 do this arrangement where everyone in intergeneration, where everyone lives 0:08:01.320 --> 0:08:04.400 on the original property and the pension is not affected. 0:08:04.680 --> 0:08:06.640 Tell me that where there's a scenario where there's two 0:08:06.720 --> 0:08:08.880 people and again the same scenario. They want the young 0:08:08.920 --> 0:08:11.360 family to move in with them, but pension doesn't matter. Right, 0:08:11.400 --> 0:08:13.360 So they have more than enough, they don't need the pension. 0:08:13.440 --> 0:08:14.240 Is it easier then? 0:08:14.760 --> 0:08:16.760 Well, this is where the center link thing stops being 0:08:16.800 --> 0:08:17.240 an issue. 0:08:17.480 --> 0:08:19.920 Right, And this is why I think I alluded to 0:08:20.000 --> 0:08:23.440 before this conversation is not so much about granny flat 0:08:23.520 --> 0:08:27.040 rights and the scent link benefits and what have you. 0:08:27.320 --> 0:08:31.840 This actually falls back to intergenerational living arrangements. You know, 0:08:32.040 --> 0:08:35.520 it ties into a state planning, It ties into retention 0:08:35.600 --> 0:08:39.240 of property within the family, It ties into family law. 0:08:39.600 --> 0:08:40.800 You know, you might just. 0:08:41.679 --> 0:08:42.679 Transfer the house to them. 0:08:42.800 --> 0:08:45.280 There's a or a co ownership arrangement or something to 0:08:45.280 --> 0:08:47.440 such an effect. And obviously that has all sorts of 0:08:47.440 --> 0:08:49.720 tie ins around you know, what's in the will, and 0:08:49.800 --> 0:08:51.800 maybe if the children separate or all that kind of 0:08:51.840 --> 0:08:54.800 stuff comes into it. But I think fundamentally it's a 0:08:54.800 --> 0:08:59.160 conversation around as a family, what do we need and 0:08:59.160 --> 0:09:01.760 how can we all benar effort in this world that 0:09:01.840 --> 0:09:04.240 is getting increased in the expensive and harder, but also 0:09:05.040 --> 0:09:07.360 that we can lift together, that we can cohabitate things 0:09:07.360 --> 0:09:09.120 that I think we kind of fell away from through 0:09:09.120 --> 0:09:11.520 the nineties and two thousands and see that coming back. 0:09:11.400 --> 0:09:15.160 Now, right. Is there any numbers about this? I know 0:09:15.320 --> 0:09:19.120 obviously intergeneration well transfer is the huge issue. We also 0:09:19.160 --> 0:09:21.400 know the property prices and the elevation, if you like, 0:09:21.559 --> 0:09:23.520 is a huge issue. Do we have any numbers about 0:09:24.000 --> 0:09:25.080 in this area. 0:09:25.280 --> 0:09:27.240 I don't have any stats on how much this has 0:09:27.280 --> 0:09:29.840 been taken up, but I do know that until the 0:09:29.840 --> 0:09:34.240 twenty twenty one the transfer of those assets was considered 0:09:34.240 --> 0:09:36.360 a D one capital gains event for the recipient, ie 0:09:36.480 --> 0:09:39.760 they paid full tax on it, and so it kind 0:09:39.800 --> 0:09:42.640 of deterred people from doing it. There's a few exemptions 0:09:42.679 --> 0:09:44.560 that the ato of are put in place, but if 0:09:44.600 --> 0:09:48.319 you meet their requirements, then that saves that tax that 0:09:48.400 --> 0:09:50.240 gives you the exemption on that tax, so that I 0:09:50.280 --> 0:09:52.200 think that's sort of drawn people to a lot more 0:09:52.240 --> 0:09:52.960 these days. 0:09:53.400 --> 0:09:56.160 The way it works, folks, is up until twenty twenty one, 0:09:56.200 --> 0:09:58.360 there was a bit of gray area and a lot 0:09:58.400 --> 0:10:01.719 of arrangements where there was build out the back and 0:10:01.880 --> 0:10:04.760 perhaps an older couple living out the back. They were 0:10:04.760 --> 0:10:08.200 informal arrangements and the Board of Taxation moved in. It 0:10:08.240 --> 0:10:10.559 looked like they were kind of clamping down, but in 0:10:10.559 --> 0:10:12.480 fact when they came out the other side of this, 0:10:12.559 --> 0:10:16.480 they sort of formalized the capital gains tax exemption for 0:10:16.600 --> 0:10:19.240 the Brandy flats. That's a really strong issue. I mean, 0:10:19.240 --> 0:10:21.160 even at the time there was three hundred and fifty 0:10:21.320 --> 0:10:26.920 thousand older Australians who lived basically in homes owned by 0:10:26.960 --> 0:10:31.360 their in homes presided in homes owned by their adult children. 0:10:31.400 --> 0:10:33.760 So those arrangements are quite prevalent. And that was a 0:10:33.760 --> 0:10:35.800 couple of years ago, so it can only have increased. 0:10:36.280 --> 0:10:37.160 Let's just look for a. 0:10:37.120 --> 0:10:40.080 Moment, Nathan. So this is a I mean, obviously this 0:10:40.160 --> 0:10:42.720 is terrific, as you say, you costiously say all the time, 0:10:43.280 --> 0:10:45.400 as long as everyone is happy to live together and 0:10:46.080 --> 0:10:48.079 you know they can work that one out for themselves. 0:10:48.120 --> 0:10:50.800 Not for our show to determine that one, But can 0:10:50.880 --> 0:10:54.080 we look very briefly at the notion of the building 0:10:54.080 --> 0:10:57.800 out the back using your property, not for that intergenerational 0:10:58.000 --> 0:11:01.880 setup in the traditional manner, but in a new manner 0:11:02.000 --> 0:11:05.680 where perhaps young adult children could live on the property 0:11:05.720 --> 0:11:08.280 in their own accommodation. How does that work and does 0:11:08.320 --> 0:11:09.760 that have the CGT exemption? 0:11:10.960 --> 0:11:14.760 So if you're talking about in that example of they 0:11:14.760 --> 0:11:16.960 living together, or we're talking about two separate buildings on 0:11:17.000 --> 0:11:17.840 the same lot. 0:11:18.480 --> 0:11:21.280 I'm imagining two separate buildings where I know people have 0:11:21.360 --> 0:11:23.920 bought larger properties and they're say, my plan is you know, 0:11:24.000 --> 0:11:25.640 my son's going to live there or whatever. 0:11:25.800 --> 0:11:28.640 Yeah, I think that will largely fall back to probably 0:11:28.640 --> 0:11:32.760 a planning issue more than anything around what can be 0:11:32.840 --> 0:11:35.880 done with that property. But the premise would fall back 0:11:35.920 --> 0:11:38.080 to how is it transferred? So an example might be 0:11:38.679 --> 0:11:40.560 that there's a large property. 0:11:40.640 --> 0:11:41.280 We'll say it's. 0:11:41.160 --> 0:11:44.040 Less than two hectares because it makes it easier and 0:11:44.120 --> 0:11:46.280 for whatever reason, there can be two buildings on it. 0:11:46.840 --> 0:11:50.760 In that instance, the parents may transfer that full property 0:11:50.800 --> 0:11:53.240 to the name of the children. The children then build 0:11:53.280 --> 0:11:55.120 the second property on there. The parents have the right 0:11:55.200 --> 0:11:57.559 to live there it could be a granny flat. So 0:11:58.120 --> 0:12:01.960 it all falls back to those two elements for Senlink 0:12:02.320 --> 0:12:04.640 if that's relevant, which is the transfer of asset for 0:12:04.640 --> 0:12:08.360 the right to live, and then meeting the requirements for 0:12:08.400 --> 0:12:11.440 the ATO, which is you know basically that it's documented 0:12:11.480 --> 0:12:14.240 that it's not commercial and there's some requirements around either 0:12:14.240 --> 0:12:16.960 being of age, pension age, or requiring. 0:12:16.640 --> 0:12:18.240 Assistance from a disability perspective. 0:12:18.320 --> 0:12:21.360 So and I'm being very blase because they are very 0:12:21.400 --> 0:12:23.080 distinct rules and you've got to make sure you get 0:12:23.120 --> 0:12:25.920 them right or it goes horribly wrong. But you know 0:12:25.960 --> 0:12:27.600 that's how that would tend to work. 0:12:28.440 --> 0:12:31.439 Okay. It's interesting and I imagine it's something that our 0:12:31.480 --> 0:12:33.800 listeners are really tuned into what we're going to do 0:12:33.840 --> 0:12:35.360 with text short break and Nithan's going to tell us 0:12:35.360 --> 0:12:37.760 about an example of where it worked out very well. 0:12:37.840 --> 0:12:40.439 Back in a minute. 0:12:44.440 --> 0:12:47.320 Hello, Welcome back to the Australians Money Positive Podcast. I'm 0:12:47.400 --> 0:12:50.800 James Kirby talking to Nathan Fradley, financial advisor and we 0:12:50.880 --> 0:12:55.720 are talking about building out the back Ymbi's yes, in 0:12:55.800 --> 0:13:00.439 my backyard please. This is optimizing your property from an 0:13:00.440 --> 0:13:05.280 intergenerational perspective. It may be for you that you're all 0:13:05.480 --> 0:13:08.880 adult children, perhaps end up actually moving into the larger 0:13:08.920 --> 0:13:11.760 house you're at the back, or it may be that 0:13:12.000 --> 0:13:15.360 you are putting an adult child in the back and 0:13:15.400 --> 0:13:18.240 you stay in the house. Nathan, just you've got to 0:13:18.240 --> 0:13:20.800 tell us a story about something you came across recently 0:13:20.840 --> 0:13:22.079 in this area. How it all worked. 0:13:22.200 --> 0:13:24.480 Yeah, this is a case I worked on about eighteen 0:13:24.520 --> 0:13:28.560 months ago, and it was effectively, we've got an only 0:13:28.640 --> 0:13:32.520 child with three kids, a partner living in a house 0:13:32.840 --> 0:13:36.840 in Sydney, discerent sized mortgage, both professionals, and then you've 0:13:36.840 --> 0:13:40.880 got mum and dad living in their house. Dad's sort 0:13:40.880 --> 0:13:43.040 of taken ill a little bit, so he needs a 0:13:43.040 --> 0:13:45.920 bit more support. Mom's still working part time and she's 0:13:45.920 --> 0:13:49.240 doing grandchildren stuff, and everyone's kind of chipping in left, 0:13:49.320 --> 0:13:49.720 right and center. 0:13:49.760 --> 0:13:50.840 There's a lot of driving around. 0:13:51.400 --> 0:13:54.920 So they decided to investigate the grainy flat option, and 0:13:54.960 --> 0:13:57.160 what they ended up doing was mom and dad sold 0:13:57.200 --> 0:14:02.040 the property and then transferred the assets to the children 0:14:02.200 --> 0:14:03.319 for the right to live there for the rest of 0:14:03.320 --> 0:14:05.200 their life. But the way they did it was they 0:14:05.280 --> 0:14:09.080 actually paid a series of invoices for a construction, so 0:14:09.400 --> 0:14:10.440 they built an extension. 0:14:10.520 --> 0:14:11.120 They went up. 0:14:11.559 --> 0:14:14.600 Kids live upstairs with their kids. There's a common living 0:14:14.640 --> 0:14:16.840 area downstairs, and mum and dad lived in a more 0:14:16.880 --> 0:14:19.960 accessible spot down below. And what that meant was that 0:14:20.440 --> 0:14:22.320 everyone's in the same household, so we all of a 0:14:22.320 --> 0:14:26.360 sudden save all that time. The kid's mortgage was substantially lower, 0:14:26.360 --> 0:14:28.320 and they actually could reduce their days of work and 0:14:28.480 --> 0:14:31.160 help out with dad more. Mum didn't have to do 0:14:31.200 --> 0:14:33.440 as much, so she could actually get back some form 0:14:33.440 --> 0:14:37.080 of social life again, and it worked really well. It 0:14:37.120 --> 0:14:40.040 worked well because they had lived together during COVID while 0:14:40.040 --> 0:14:43.840 they were saving for that house. Yep, exactly a very 0:14:43.880 --> 0:14:46.520 important mine. It's not in everyone likes ramon situation. You know, 0:14:47.040 --> 0:14:50.000 they only child, so there was that. You know, the 0:14:50.040 --> 0:14:52.280 inheritance piece was less of a concern because once that 0:14:52.680 --> 0:14:56.280 those assets are transferred, they're not the parents' assets anymore. 0:14:56.600 --> 0:14:58.560 They were also quite young, so they're in their. 0:14:58.400 --> 0:15:02.120 Mid sixties or midi late sixties, which meant that the 0:15:02.320 --> 0:15:05.520 transfer itself, when you calculate how much they could transfer, 0:15:05.600 --> 0:15:08.160 was quite high. It was about nine hundred grand, so 0:15:09.200 --> 0:15:11.040 it meant that they could move closer into the city, 0:15:11.120 --> 0:15:13.680 be with a family, still maintain their pension as before 0:15:13.880 --> 0:15:15.640 a little bit of cash left over from the sale, 0:15:16.000 --> 0:15:19.880 but overall everything worked together and then sadly unfortunately a 0:15:19.960 --> 0:15:24.040 dad passed away, but everyone was together for that and 0:15:24.240 --> 0:15:26.320 is still together, so mum's down and living by herself. 0:15:26.520 --> 0:15:29.000 So it kind of had a big flow on effect 0:15:29.080 --> 0:15:32.000 from that around the benefits. But I think, again I 0:15:32.080 --> 0:15:34.360 mentioned before, the stars do align with that one. It's 0:15:34.360 --> 0:15:37.040 a great example of when it works. But you know, 0:15:37.280 --> 0:15:38.760 there's definitely broader considerations. 0:15:39.440 --> 0:15:40.480 Okay, what we. 0:15:40.480 --> 0:15:42.480 Might do is actually get you to just listen, what 0:15:42.640 --> 0:15:46.680 are the key issues to examine if you're thinking of 0:15:46.720 --> 0:15:49.880 this folks. And obviously it course without saying it does 0:15:49.920 --> 0:15:55.560 sound like this really an advisor is ninety nine percent 0:15:55.560 --> 0:15:58.920 compository here just before we do. In terms of the 0:16:00.280 --> 0:16:02.440 commitment that must be made in this, it sounds to 0:16:02.480 --> 0:16:04.720 me that it is the older people that must make 0:16:04.760 --> 0:16:07.880 the commitment, and they must actually sign off a former 0:16:07.960 --> 0:16:13.280 document where they attained the right to live on the property, 0:16:13.480 --> 0:16:15.720 so that's part of their security and it is that right. 0:16:16.280 --> 0:16:20.760 Yeah, so you've got you've got a contract, right, it's 0:16:20.760 --> 0:16:23.560 a commercial arrangement or private arrangement twent two people or 0:16:23.560 --> 0:16:27.280 between those parties, and that document will should have certain 0:16:27.280 --> 0:16:29.320 words in it for cen Lenk purposes, and it should 0:16:29.360 --> 0:16:31.640 have certain words in it for the ats purposes. But 0:16:31.680 --> 0:16:34.520 then broader than that, it should include what the terms 0:16:34.560 --> 0:16:36.720 of the arrangement are we're going to move in. And 0:16:37.040 --> 0:16:39.680 in that case I talked about, the idea was we 0:16:39.760 --> 0:16:41.480 never want to go into residential care. 0:16:42.240 --> 0:16:44.480 Yes, right, and it's written in black and white that 0:16:44.600 --> 0:16:46.440 they have the right to live there forever. 0:16:47.120 --> 0:16:49.120 Forever has to be, has to be. 0:16:49.720 --> 0:16:52.200 There can be exit clauses if it doesn't work, and 0:16:52.280 --> 0:16:54.440 things like that. There is a five year rule that 0:16:54.560 --> 0:16:57.240 sen Alink apply that if it breaks for reasons you 0:16:57.320 --> 0:17:00.000 should have known when you entered it within five years, 0:17:00.160 --> 0:17:02.280 they just unwind the whole thing and chase up the 0:17:02.280 --> 0:17:06.160 pension basically. But in this instance, the agreement was that 0:17:06.240 --> 0:17:09.800 if age care residential care was on the cards, that 0:17:10.440 --> 0:17:13.280 either one of the kid or their wife would actually 0:17:13.680 --> 0:17:16.800 quit their job take care of mum. So there's a 0:17:16.840 --> 0:17:20.760 commit there's a future commitment that sort of tied into 0:17:20.800 --> 0:17:23.159 that that there was this joint what are we going 0:17:23.240 --> 0:17:23.399 to do? 0:17:23.440 --> 0:17:25.680 And that is very that's a very private matter. 0:17:25.760 --> 0:17:28.000 I think how people want to navig at that, what 0:17:28.080 --> 0:17:30.600 the line is for care all of those things. And 0:17:30.640 --> 0:17:32.800 then also or you know who pays for what we're 0:17:32.800 --> 0:17:34.240 going to move in, We're giving this lump sun we 0:17:34.240 --> 0:17:35.680 don't want to have to pay for any more utilities, 0:17:35.760 --> 0:17:37.600 or will chip in this much, all those kinds of 0:17:37.680 --> 0:17:40.119 things that all factors in. So that gets done as 0:17:40.119 --> 0:17:43.080 an agreement. So you should absolutely be getting legal advice 0:17:43.480 --> 0:17:46.159 and both sides should. Those agreements are only as good 0:17:46.200 --> 0:17:48.520 as the advice that he's given on them. So I 0:17:48.520 --> 0:17:50.560 think that's crucial outside of obviously for a. 0:17:50.760 --> 0:17:53.479 Chart is that is both generations basically it should get 0:17:53.480 --> 0:17:54.399 their own legal advice. 0:17:54.520 --> 0:17:56.480 Yeah, one would draft the document, the other one would 0:17:56.480 --> 0:17:58.119 get advice on the document drafted. 0:17:58.280 --> 0:17:58.879 Yeah. 0:17:59.000 --> 0:18:02.280 I think the estate planning stuff comes into that as well. Again, 0:18:02.440 --> 0:18:04.560 a lawyer that does both is usually pretty common. But 0:18:05.160 --> 0:18:08.959 the transfer of assets changes estates, you know, it changes 0:18:09.000 --> 0:18:12.760 the dynamics of the will it's in place, and other siblings, 0:18:13.040 --> 0:18:15.080 is everyone on the same page, all that kind of stuff, 0:18:15.480 --> 0:18:17.040 And then the family law respects. 0:18:17.600 --> 0:18:18.439 I did one recently. 0:18:18.480 --> 0:18:21.240 There was a double granny flat, so nana and mum 0:18:21.240 --> 0:18:24.560 and dad and so there was a family law consideration 0:18:24.640 --> 0:18:27.160 of a's one point four million dollars coming across from 0:18:27.200 --> 0:18:30.600 my family. So they did a binding financial agreement as 0:18:30.640 --> 0:18:33.920 well to kind of build that into the process. And 0:18:34.160 --> 0:18:37.000 these are all these sort of formal considerations that are 0:18:37.640 --> 0:18:39.920 you know, I mean, ultimately you have to get along firstly, 0:18:40.280 --> 0:18:42.520 but I think this is one of those areas if 0:18:42.520 --> 0:18:45.000 you don't, if you don't pay to do it properly, 0:18:45.440 --> 0:18:48.040 you definitely can't afford to pay when it absolutely goes wrong. 0:18:48.840 --> 0:18:53.639 Yeah, Okay, well yes, I imagine. So so there you 0:18:53.680 --> 0:18:56.399 are for isn't that really fascinating? And I think we've 0:18:56.400 --> 0:18:58.600 got to see more and more of this. As you say, Nathan, 0:18:58.640 --> 0:19:00.320 it's hard to get stats on it. The onliest we 0:19:00.440 --> 0:19:02.880 have was that three hundred and fifty thousand and that 0:19:02.960 --> 0:19:06.080 was elderly Australians living, you know, with their own children. 0:19:06.480 --> 0:19:09.280 But one thing we do know from just all you 0:19:09.359 --> 0:19:13.080 have to do is look at property listings. Intergenerational properties 0:19:13.200 --> 0:19:16.200 are not just on the market, but they are being 0:19:16.520 --> 0:19:19.640