Following the breakdown of a marriage or De facto relationship, all parties need to consider how they are going to divide their property. Coutts provide legal advice and assistance in relation to asset division, spousal maintenance and superannuation splitting. Where an agreement for property division has been reached, we assist our clients in formalising this process, by way of, filing consent orders in the Federal Circuit and Family Court of Australia or the drafting and execution of a Binding Financial Agreement. Finalising the property settlement process by way of Consent Orders or a Binding Financial Agreement, may allow a party (in the event of a transfer of real property into their sole name) to be exempt from payment of Stamp Duty.
In a property settlement, the definition of ‘property’ includes a wide range of assets, such as: family home, investment properties, savings and investment accounts, shares, superannuation, Vehicles/vessels including but not limited to cars, caravans and boats, business interests and at times, even inheritances. It also considers any liabilities or debts that either party may have.
The Court has adopted a 4-step approach to resolving family law property matters.
Identifying the property pool
The first, and arguably the most important step, is to accurately identify the property pool of the parties. This step involves identifying and valuing all assets of the relationship, regardless of whether they are held in the sole name of one party, or jointly. At this stage, both parties are obligated to provide full and frank financial disclosure to enable both sides to accurately identify, and value, the property pool. Financial disclosure documents include bank statements, pay slips, tax returns, superannuation statements, property valuations and where one party owns or has an interest in a business, all financial documents in relation to that business.
The Court then considers the contributions of each party at the beginning of the relationship, throughout the relationship, and since separation. Contributions that are considered relevant include financial, non-financial and homemaker/caretaker duties. Financial contributions that are considered include an evaluation of whether either party owned property of a significant value at the commencement of the relationship, whether one party made higher financial contributions throughout the relationship, or any special contributions where one party received an inheritance or lump sum payment.
Non-financial contributions encompass the circumstance where one party has made significant improvements to the financial assets of the party. For example, where one party renovated the former matrimonial home and undertook all labour on their own, which resulted in an increase in the value of the property, that party has made a significant non-financial contribution.
The Court also takes into consideration the contribution of each party as homemaker and caretaker for any children of the relationship. Where the contributions of the parties are not equal, this may result in an adjustment of the property pool in favour of one party.
The Court also takes into account the future needs of each party, and the effect that the property settlement will have on these needs. Some examples of considerations include the age of the parties, the health of the parties, the income earning capacity of each party, which party will have the majority care of the Children and whether the Children have any specific future needs as well.
Fair and equitable
Finally, before deciding whether to alter the property interests of the parties, the Court will consider whether the proposed arrangement is fair and equitable in the circumstances.
In some cases, a spouse may be entitled to receive spousal maintenance. Spousal maintenance is provided for in the Family Law Act 1975 under Section 72 which states that the test as to whether spousal maintenance is applicable is as follows:
- If one party is unable to support themselves, whether because they have the care of a child of the marriage under 18 or because they are unable to obtain gainful employment by reason of age, physical or mental incapacity or any other reason; and
- The other party is reasonably able to pay spousal maintenance
Then the party able to pay spousal maintenance is liable.
How can we help?
The Family Law team at Coutts have extensive experience in negotiating financial settlements. Our Lawyers continuously strive to achieve an outcome for the client which is not only in their best interests, but also fair and equitable. We provide timely, accurate and informative advice at every step of the process to ensure that you are able to make informed decisions. Contact us today!
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