Property Settlements  

When a relationship breaks down, one of the essential things that has to be addressed is the untangling of finances. What is to happen with the jointly owned home, what do you do about unequal superannuation benefits, how are investments and inheritances handled are all typical questions which need to be answered at this time.

Family lawyers often hear our clients say things like “ Why don't we just divide things equally?”  and “ Don't mums with kids get two-thirds?.” Everyone’s case and circumstances are that bit different, so you need expert advice as to what your reasonable share might be, with the framework established  by the courts to calculate the division.

This involves a four-step process:

For the first step, you prepare a statement of the family's assets and liabilities. This is prepared for the family as a whole, regardless of in whose name a particular asset may be; because an asset may be in a particular name for many reasons. A separate statement is prepared for superannuation, because superannuation is a future asset, one that does not help feed, clothe or house people today. Family Law requires a full disclosure of both parties' finances, and valuations or appraisals of the worth of various types of properties, bank and credit card statements and superannuation statements are usually exchanged as part of this process.

The second step is the assessment of each party's contributions. These contributions will usually be both financial and non-financial, and the law requires that contributions as a parent and homemaker be given a real value. In most Australian families where Dad is the major breadwinner and Mum the major parent and homemaker, those contributions are likely to be seen as equal. If one party or another has made or received special contributions an adjustment will be made, and typical examples of this are where a party brought a lot more financially into the relationship at the beginning, or if one has been given parental assistance or has received an inheritance.

Contributions can be negative, so allowances can be made if one party has been a chronic gambler, wasting family funds, or if, say, a mother has had to bring up her family facing constant domestic violence. 

This step, Step 2, looks back to the past, and will produce an assessment of the respective contributions as at the time of the assessment.

Step 3 looks forward, and looks at whether adjustments need to be made to the Step 2 outcome, based on future needs and responsibilities. The most common Step 3 factors are the ongoing primary care of children, and the age, health and the earning capacities of the parties, matters often related. How much allowance is made for parenting responsibilities will depend on the number and age of the children, any special needs and the involvement of the other parent. There are other factors, but those are the common ones. It is this step, which usually is the hardest for judges and lawyers to assess.

Once a Step 2 assessment has been made, any adjustments needed for the future by Step 3 are made, and a percentage reached.  The final stage is to look at the overall result achieved from the previous steps and see if the outcome is fair and reasonable, but it is not that common that further adjustments are made.

A result can be achieved by the parties agreeing themselves, by mediation, by using the lawyers' experience to negotiate an agreement, or as the last and most expensive way, by a court decision Assuming you can agree without a court decision, settlements are usually documented by "Consent Orders". These are court orders, as binding as a judge's decision, but are obtained by submitting the appropriate paperwork to the court, without anyone actually physically attending. A settlement can also be documented by what lawyers call a Binding Financial Agreement - a BFA- but usually consent orders will be used. Whichever method is used, there will be stamp duty concessions on any transfer of property between the parties, and for investments there can be Capital Gains Tax benefits

Where there is to be an adjustment of superannuation benefits between the parties that can be provided for in the consent orders or BFA and the superannuation company then has to make the necessary transfer. Any amount transferred will, however, remain as superannuation.

As you can see, the process requires judgment and experience to help you achieve the right outcome.

To get the help you will need, contact the Family Law Expert at Barwick Boitano on 02 9630 0444.