Family Law - Later in Life

Regardless of age, the family law principals are the same.  But for those who are older, some family law issues may be more relevant than others.

 

Long Relationship

If separation has occurred after a long relationship, then the family law principals push a property division towards a 50/50 split.  There needs to be a strong reason to vary much from the 50/50 (and sometimes there is).

Not the first Relationship

It is just as common for it not to be a first relationship, but a shorter subsequent relationship. In this case, what assets, debts and super each party had at the start of the relationship is very important. There is not the same push to a 50/50 split, as other family law factors have greater importance.

Children not an issue?

Often children are adult and the family law usually only deals with children under 18 years old.  Sometimes children become involved in their adult capacity. Sometimes (but not often) adult children can be a witness.

Superannuation

Superannuation is often a large factor has it has had time to accumulate during each parties' working life.  It can be the biggest asset at the time.


There is also a greater likelihood that the super maybe one of the older and less common types of defined benefits schemes. Theses are complicated schemes and they are not all the same. How they are treated by the family law is not straight forward.   Whether it is treated as an asset or income can have huge impact on the outcome. Great care is needed.

Health and Future Needs

A party's health is always relevant, but for those who are older the health issues can be more serious and because of this have a larger impact on the family law outcome.

Death & Family Law

While uncomfortable to think about, it needs to be considered if there is a chance that one of the parties may pass away. If either party dies then the family law rights of both parties is lost.  The surviving  party could get everything. The safety net is to start court proceedings, for once court action is started it can be continued by the estate of a party should they pass away.

Wills, Power of Attorneys and superannuation beneficiaries, should all be reviewed and updated if needed.

Financial Advice

Financial Advice is always a good idea, that is, advice about the best way to own and invest your assets and income. Lawyers are not qualified or allowed to give this advice. A suitable financial adviser is needed.

For those approaching or in retirement, this is an important issue because the family law settlement may need to set the party up for retirement.  Issues of Centrelink and other entitlements need to be considered. If advice is obtained early, then the family law settlement can be structured to maximise the opportunities.

   

Finding the Hidden Assets

The first step in any family law property division is working out what are the assets and liabilities. This may be as easy as making a list. But it can be difficult where one person largely controlled the finances during the relationship; where there are companies and trusts involved or where one person tries to hide assets.

In such cases digging is needed to find out what assets exist. Lawyers put on their private investigator hat as there are number of ways to find hidden assets.

 

Get and review all available documents

Starting point is to get all available financial documents. Documents needed vary from case to case, but the starting point includes bank statements, tax returns, wage slips etc

Sources of Information and documents

  • Each party has a duty of disclosure under the Family Law act provide each other with all relevant financial information and documents.
  • The accountant
  • Past solicitors who may have had conduct of real estate or other transactions. Their file is not privileged.
  • Bank statements for last 7 years can be obtained from banks and are often available through online banking portals at no cost.
  • Australian Taxation Office will have all past tax returns and other information about tax payments
  • Past and current loan and credit applications are a good source of information.
  • Super funds
  • ATO MyGov super search
  • Lands Title searches of
  • ASIC
  • Will of any recently deceased close relative
  • Facebook

What lawyers look for

When reviewing financial documents, what lawyers look for include;

  • references to unusual transactions
  • large transactions
  • transfers to or from bank accounts that are not known
  • bank accounts referred to in payslips tax returns that are not known
  • super funds that are listed on payslips are not known.
  • sources of income listed in tax returns,that you share dividends or interest on bank accounts.
  • Tracing where  money came from and went to from real estate and other large purchases and sales.

Legal Tools

If court proceedings have been commenced the court system offers a number of additional tools.

  • Court Orders for disclosure
  • Subpoenas
  • Discovery of documents
  • Notice to Admit Facts

Dig Deeper

In most circumstances, if needed, forensic accountants are engaged to dig deeper into financial transactions.

Reversing Transactions

If it is found that a party sold,gave away or transferred a major asset which significantly impacts on the other parties family law entitlements, and the family Court has power to reverse that transaction.

Trusts

Putting assets and trusts will not protect the asset from a family law claim. In family law generally, it does not matter whose name and asset is in ( including a trust name), it is an asset associated with the parties it can be brought into account.

Golden Rule - trying to hide assets is usually pointless. It will also add considerably to legal costs and place the person trying to hide assets at the risk of a significant cost order against them.

 

FAMILY LAW MYTHS 

When it comes to separation and divorce, and how the assets and debts are to be divided, there is much “backyard” advice.  Much of it is wrong. Here are some of the common family law myths (and what is the law)…

 



 Wrong

Correct


We will each just get 50/50

There is no automatic 50/50 division of assets. There is no “standard” division. Who gets what depends on two main factors, contributions of all types and future financial circumstances.


The house is in his name so he gets it

It does not matter who owns an asset or liability. This includes superannuation and trusts. The family law can change ownership.


If I leave the home I lose my rights to it.

If a spouse   leaves the home it does not affect their family law rights in that house.


I need to wait for a divorce to do a property settlement

There is no need to wait for a divorce to do a property settlement. They are largely separate issues.


He/she walked out so he/she gives up everything

The cause of the relationship breakdown, or, who left who, is not a factor that affects who gets what.

Mostly, Family Law is a no-fault system.


I earned all the money so I get more

Earning income and looking after family and home are both significant contributions.   The value or importance of a spouse caring for the home and family is normally given the same value as the money earned from employment of the other spouse. This is the case no matter how high the paid income.



I owned it before we got together so it’s mine

All assets and debts form part of what can be divided, no matter when they were obtained.

But this does not mean each spouse will get 50%. When and how an asset was gained is important in working what each spouse gets.



We only split up what we had at separation

Like assets held before the relationship, assets gained after separation can be claimed by the other spouse. Even years after separation if a binding agreement is not done.



It’s only what it is worth at separation that matters

Assets and debts are valued at the date of agreement or court hearing, which can be sometime after separation.



Values are based on what they could be sold for, not what they cost; not what it would cost to replace them and not what they are insured for.


He /she earned his/her super so I have no claim on it

Superannuation is like any other asset. It can be divided between spouses.


A handshake agreement will do

Without a legally binding agreement a claim can still be made against assets many years later. Sometimes even after a divorce.



If a family law claim is made it will include the assets that may have been bought or earned after separation.
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