First Home Buyer? Here's What to Expect From the Legal Side of Buying a Property
Buying your first home is one of the most exciting things you'll do. It's also one of the most legally complex transactions most people will ever be involved in.
The good news is that the legal process is straightforward when you know what to expect. Here's a step-by-step overview of what happens behind the scenes from a legal perspective.
Start the Conversation Early
The best time to talk about future planning is when your parents are well and able to make their own decisions. Waiting until a health crisis forces the issue means fewer options, more stress, and potentially decisions being made by someone other than your family.
Approach it gently. Frame it around giving them control over their own future rather than taking anything away. Most parents appreciate knowing their wishes will be respected.
1. Check That Their Will Is Up to Date
When was the last time your parents reviewed their will? If it was written more than five years ago, or before a significant life event like retirement, a grandchild's birth, or the death of a spouse, it may no longer reflect their wishes.
Things to check:
- Are the named beneficiaries still appropriate?
- Is the executor still willing and able to take on the role?
- Does the will account for all current assets, including superannuation and any new property?
- Are there any specific gifts or bequests that need updating?
If your parents don't have a will at all, this should be the first priority.
2. Make Sure Powers of Attorney Are in Place
This is arguably the most important document for ageing parents. An enduring Power of Attorney allows a trusted person to manage financial and legal affairs if your parent loses the capacity to do so themselves.
Without one, your family would need to apply to VCAT (Victorian Civil and Administrative Tribunal) to be appointed as administrator. This process takes time and money, and the outcome isn't always what the family would have chosen.
There are two key types:
- Enduring Power of Attorney (Financial) - covers bank accounts, bills, property, and financial decisions
- Enduring Power of Attorney (Medical Treatment) - covers healthcare and treatment decisions
Both should be in place while your parent still has capacity to sign them.
3. Understand Advance Care Directives
An advance care directive lets your parent document their preferences for future medical treatment and care. This might include:
- Whether they want life-sustaining treatment in certain circumstances
- Their preferences around palliative care
- Values and beliefs that should guide medical decisions
- Where they would prefer to receive care
This document gives medical professionals and family members clear guidance during difficult moments, and it reduces the emotional burden on the people making decisions on their behalf.
4. Review Superannuation and Beneficiary Nominations
Superannuation doesn't automatically form part of your parent's estate. The super fund trustee decides who receives the balance unless a valid binding death benefit nomination is in place.
If your parent hasn't updated their nomination, or if they have a non-binding nomination, the funds may not go where they intended. This is a common gap in estate planning that's easily fixed.
Check whether their nomination is:
- Binding - the trustee must pay the benefit to the nominated person
- Non-binding - the trustee considers the nomination but makes the final decision
- Lapsing - some binding nominations expire after three years and need to be renewed
5. Know the Aged Care Financial Landscape
If your parent is considering moving into residential aged care, there are significant financial and legal decisions involved:
- Refundable Accommodation Deposits (RADs) - lump sum payments that can be substantial
- Daily Accommodation Payments (DAPs) - an alternative to paying a lump sum
- Means-tested care fees - based on your parent's income and assets
- What happens to the family home - selling, renting, or leaving it vacant all have different implications
Getting legal and financial advice before committing to an aged care arrangement can save tens of thousands of dollars and protect your parent's assets.
6. Consider Whether a Family Agreement Is Needed
Sometimes family members contribute financially to a parent's care, or a parent moves in with an adult child. These arrangements can work well, but they can also lead to disputes if expectations aren't documented.
Consider putting agreements in writing for situations like:
- A child paying for renovations to a parent's home in exchange for an expected inheritance
- A parent contributing to a child's mortgage in return for a granny flat arrangement
- Shared care responsibilities between siblings
- Financial contributions toward aged care costs
A written agreement protects everyone and prevents misunderstandings down the track.
7. Consolidate Important Information
Beyond legal documents, make sure someone in the family knows where to find:
- Wills and Powers of Attorney
- Bank account details and financial institution contacts
- Insurance policies (health, home, life)
- Superannuation fund details
- Medicare and pension information
- The contact details for their solicitor, accountant, and financial adviser
- Login credentials for important accounts (consider a password manager)
Having this information accessible saves enormous time and stress during an emergency.
It's About Peace of Mind for Everyone
Helping your parents plan isn't about taking over. It's about making sure their wishes are documented, their assets are protected, and your family isn't left scrambling during an already emotional time.
Most of these steps are straightforward and can be sorted in one or two appointments with a solicitor.
Want to help your parents get their affairs in order? Our wills, estates, and elder law team can guide your family through the process. Call us on (03) 9787 4511 or book a consultation.
