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Published by Ross Holmes Virtual Lawyers Limited (RHL)
Helping a child into a home is one of the most common things parents do — and one of the least documented. A recent High Court decision, Smith v Koppens [2026] NZHC 759, shows what can happen when the sums are large, the paperwork is thin, and the home is owned by the child’s family trust. The mother put in close to half a million dollars, expected to live there for life, and ended up in court. This article explains what the Court decided, why a trust owning the home did not defeat her claim, and how to document family money so it never comes to this.
Key points
• In Smith v Koppens [2026] NZHC 759, a mother advanced close to $485,000 toward a home owned by her son and his trust.
• She expected to live there for life; when the relationship broke down, she claimed a half-share.
• The High Court imposed a constructive trust and gave her a 35% interest, applying Lankow v Rose.
• A trust owning the home did not defeat her claim — contributions and a reasonable expectation were enough.
• A statutory declaration wrongly stating the money “was not a loan” hurt her credibility. Document family money clearly and truthfully.
What happened in Smith v Koppens
The decision is anonymised, so the parties are known as “Jane” (the mother) and “Jacob” (the son). Over time, Jane advanced money to Jacob and later to his family trust, and she moved into the property expecting to live there for the rest of her life. Jacob acknowledged that he owed his mother money, but disputed the amount and said that while he was happy for her to live in the home, he never intended her to own half of it.
The sums were substantial: a $100,000 advance; about $214,547 used to repay borrowing secured against the property Jane moved into; a separate $170,000 that was described as an “early inheritance”; and further payments toward improvements. Awkwardly, the $100,000 had been recorded in a statutory declaration stating that it was not a loan — yet the Court accepted that the parties in fact understood Jacob would repay it, and that the money went into the property.
Why the trust did not save the day
Many people assume that if a home is owned by a trust, money someone else puts into it cannot give them an ownership stake. Smith v Koppens shows that the assumption is wrong. The Court applied Lankow v Rose [1995] 1 NZLR 277 — the leading New Zealand authority on constructive trusts — which asks, in essence, four questions: did the claimant contribute to the property; did they reasonably expect an interest in return; would the owner reasonably expect to yield one; and would it be unconscionable to deny it?
Because Jane had contributed significant sums and reasonably believed she could live in the home for life, the Court found it would be unconscionable to leave her with nothing. The fact that a trust — rather than her son personally — held the legal title did not change that analysis. A constructive trust can arise over trust-owned property just as it can over property owned by an individual.
What the Court awarded
Jane sought a half-share. Jacob accepted that she should have something, but not half. The Court settled on a 35% interest, held on constructive trust for Jane — though that interest is subject to the borrowing secured against the property, so its net value may be lower. The Court was also candid about the evidence, noting that Jane had appeared willing to sign a statutory declaration that was not true. It is a pointed reminder that a document created for convenience can come back to undermine the very person it was meant to help.
Two 2026 cases, opposite results
In an earlier article, The Bank of Mum and Dad: help your child — but get it in writing, we looked at Liao v Liao [2026] NZCA 250, where parents who contributed about $52,000 toward their daughter’s Auckland property went to two courts to get it back — and lost, because the money was treated as a gift. Smith v Koppens is the mirror image: a person who put money into a home she did not own — one held in a trust — succeeded in winning a share of it.
Put the two decisions side by side, and the lesson is unmistakable. In Liao, the absence of documentation meant a parent could not recover money they believed was theirs. In Smith v Koppens, the absence of clear, honest documentation meant a son could not keep a home he believed was entirely his. The same root problem — money moving within a family without a proper record — produced opposite but equally costly results. Whether you are the one giving or the one receiving, undocumented family money is where expensive disputes begin.
The one thing most people get wrong
Here is the trap. People assume the paperwork protects them — that a signed statutory declaration, or a home safely tucked inside a trust, settles who owns what. Smith v Koppens shows the opposite can be true. A statutory declaration that misdescribes the money (here, calling a repayable advance “not a loan”) does not make it so; the Court looks at what actually happened. And a trust that holds the title does not stop a contributor acquiring an interest through a constructive trust.
The real protection is not a clever document. It is an honest, clear record of what the money is and what everyone intends — made at the time, not reconstructed years later in a courtroom.
Getting family money right: gifts, loans and the right to live there
Most of these disputes never need to happen. If you are advancing money to family — or receiving it — a few plain documents make all the difference:
• Decide and record whether it is a gift or a loan. A gift is given with no expectation of return; a loan is repayable. Write down which it is. “We’ll sort it out later” is what ends up in court.
• If it is a loan, put it in writing. A loan agreement or deed of acknowledgment of debt should set out the amount, whether interest applies, and how and when it is rto be repaid
• If you’ll live in a home you don’t own, record that too. An occupation right or licence to occupy can set out your right to live there and what happens on a sale, a death, or a falling-out.
• Never sign anything that isn’t true. A statutory declaration or agreement that doesn’t reflect reality will not help you — and can seriously damage your position if the matter is litigated.
• Where a trust is involved, keep its records straight. The trustees should approve and record the arrangement, so the trust’s paperwork matches what actually happened.
None of this needs to be adversarial. Clear paperwork is a kindness to everyone — it protects the parent, the child, and the relationship between them.
Frequently asked questions
If our home is in a trust, can someone who helped pay for it still claim a share?
Yes. As Smith v Koppens shows, a constructive trust can arise over trust-owned property where someone has contributed and reasonably expected an interest. A trust is not a shield against that kind of claim.
Is the money I give my child a gift or a loan?
Whatever you record — and, if you don’t record it, whatever a court later infers from the circumstances. If you intend repayment, document it as a loan; if you don’t, document it as a gift. The mistake is leaving it unclear.
We wrote that the money “was not a loan”. Does that settle it?
Not necessarily. A court looks at what actually happened and what the parties truly intended. A document that doesn’t reflect reality can be set aside — and, as in this case, it can hurt your credibility.
I want to live in a home my child owns. How do I protect that?
Record the right to live there — for example through an occupation licence — and address what happens on a sale, a death, or a dispute. Get advice before you move money or move in.
Could a gift to my child become relationship property if they separate?
It can, depending on how it is used and documented. That is exactly the kind of thing worth taking advice on before you give, not after.
What you can do — and where we can help
• Family loans and gifts — we can prepare clear loan agreements, deeds of acknowledgment of debt and gift documentation, so everyone knows where they stand.
• Occupation arrangements — if you’re contributing to a home you’ll live in but not own, we can put the right protections in place.
• Trusts done properly — we can make sure your trust’s records reflect reality and review whether the structure still does what you need.
• If a dispute has already arisen — we can advise on your position and your options.
Where to get information and support
• Our earlier article: The Bank of Mum and Dad — help your child, but get it in writing (the Liao v Liao side of the story).
• RHL — estate planning (trusts and wills): rossholmeslawyers.com/estate-planning.
• RHL — property law and conveyancing: rossholmeslawyers.com/property-law.
One change to watch
Constructive-trust claims like this turn on their own facts, and the courts continue to refine how Lankow v Rose applies to trust-owned homes and blended families. With more family wealth held in trusts, and more parents helping children into housing, expect more of these disputes — and more reason to get the documentation right from the start.
Thinking of helping family into a home, or contributing to one you’ll live in but not own? RHL can put the right documents in place so goodwill never turns into a court case. Get in touch.
This article is general information only and is not legal advice. It comments on a decided case, and outcomes depend on their own facts. Your situation is unique; please obtain specific advice before acting. The law is described as at August 2026 and may change.
About the author
About the author. Ross Holmes is the Managing Director of Ross Holmes Virtual Lawyers Limited and a contributing author to the LexisNexis Law of Trusts (New Zealand). The firm advises on property and conveyancing, estate planning (trusts and wills), personal law, business law, seniors law and estates, entirely online, from Auckland and Rotorua. rossholmeslawyers.com · Contact us
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