In these uncertain times Mathews Family Law continues to be available to provide you with family law advice and support
Mathews Family Law & Mediation Specialists has created many detailed articles answering the most common questions people have in relation to their rights and Australian Family Law.
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Vanessa Mathews recently trained as a ‘Parenting Coordinator’ as an additional dispute resolution service offering.
Parenting Coordination is a post-separation child-focused dispute resolution process.
Parenting Coordination is suitable for separated parents who:
Parenting Coordination may assist separated parents who are experiencing difficulty:
A Parenting Coordinator may be jointly appointed by the parents or a Family Court Order.
A Parenting Coordinator is usually appointed for 24 months with monthly joint meetings.
The purpose and role of the Parenting Coordinator is defined within the Parenting Plan or Family Court Order.
A Parenting Coordinator assists parents by:
Parenting Coordination is non-confidential and fully reportable to the Family Court.
Safety concerns are addressed during Parenting Coordination.
Generally speaking, inheritances are not excluded or otherwise quarantined from the asset pool to be divided between separating parties, and will not automatically be allocated back to the party who received them.
Some of the relevant factors the Court takes into account are as follows:
Timing and length of relationship
For example, an inheritance received very early in a long relationship might not result in a significantly higher contributions assessment to the party who received it, because the other party might have made other contributions over the years which offset the effect of the inheritance.
An inheritance received late in the relationship or after separation in a short relationship, is more likely to result in a higher contribution assessment to the party who received it.
The amount received – and compared with the asset pool to divide – will affect the Court’s ultimate decision.
For example, a smaller amount (say $20,000 inheritance in a pool of $1.5m) is less likely to result in contributions being assessed in favour of the party who received it than a larger amount (say $1m in a pool of $1.5m).
How it was applied
If the money was used for family holidays or otherwise spent and is no longer represented in the asset pool, it will carry less weight when assessing contributions than if it was used to purchase real estate or shares and those assets still exist at the time the Court is making a determination. It may also be relevant if the funds have been kept separate and not otherwise mingled with the parties’ assets.
Financial circumstances of the parties at the time the Court makes a decision
In a pool of $1m, where one party receives a post-separation inheritance of $500,000, it might not be just and equitable for one party to receive half of the net assets ($500,000) and the other to receive the other half plus the whole inheritance ($500,000 plus $500,000). The Court will consider the whole financial situation.
Inheritances received after separation
If one party receives an inheritance after separation but before property settlement has been agreed and formalised, the inheritance will be taken into account in the property settlement as the Court must consider all of the current financial circumstances at the time the determination is being made.
This is one of the reasons why it is recommended that separating parties finalise and formalise their property settlement as soon as possible.
This does not necessarily mean that the other party will receive a portion of the inheritance. The Court might determine that the other party made no contribution to the inheritance, but it will be taken into account and adjustments might be made in favour of the other party who does not receive the inheritance.
A future inheritance will usually only be taken into account if the death of the testator is imminent.
As the inheritance has not yet been received, the Court could not include it in the asset pool, but can take it into account in assessing the respective future needs of the parties.
How can an inheritance be protected against claims by the other party?
Parties to a marriage or de facto relationship can protect future inheritances by entering into a Binding Financial Agreement which sets out how any inheritance would be dealt with in the event of separation.
If parties have separated and there is a possibility that one party will receive an inheritance in the future, it is recommended that they finalise their property settlement as soon as possible, and before the death of the testator.
Specialist Family Law advice is essential. Let your client know about our free initial telephone consultation service by calling Vanessa Mathews on 9804 7991.
We’re operating as usual at Mathews Family Law. If you have any questions or concerns about how COVID-19 may impact your client’s position in relation to their family law matter, call Vanessa Mathews on 9804 7991 or email firstname.lastname@example.org.
Not surprisingly, Family Law clients are expecting business valuers to take into account the economic impact of the COVID-19 pandemic in their valuation reports. This is a difficult, if not impossible, task where a valuer can only take into account information known or knowable at the date of valuation.
Most valuations currently being prepared would be based upon 30 June 2019 or 31 December 2019 figures. The existence of COVID-19 was not known as at 30 June 2019, and its impact upon the Australian economy (and specifically upon the business under consideration, which might be impacted negatively or positively depending upon the nature of the business) was not known as at 31 December 2019.
It is difficult to know when will be the right time to value a business as we do not know how long restrictions will continue or when the full impact of the pandemic will be identifiable. Other related complexities include the adjustments to reported results for trading and profitability which will be required over the affected period, and taking into account the temporary effect of government and bank concessions. Accordingly it is likely to be some time before a valuation can accurately reflect the full impact of COVID-19.
The current health climate has brought along with it a range of questions and uncertainties, and introduced additional pressures and stresses associated with the pandemic. To assist clients (and service providers alike) in navigating these times whilst simultaneously managing their family law matters, the following five points for clients to navigate Covid-19 can assist clients during this period and help to alleviate some of the associated uncertainties:
Per the recent advice from the Legal Services Commissioner, it is imperative that whilst clients may be tempted to use present circumstances brought on by the global pandemic for their own personal benefit, practitioners have a duty to inform their clients that it is not appropriate to engage in sharp practice or exploit those who are vulnerable. For example, a client may be unreasonably withholding a child (contrary to a court order or parenting plan) on the basis that the child should not leave the home due to the pandemic. Parents should exercise their best judgement and a common-sense approach to determine what is, and what is not appropriate in the circumstances and seek alternative solutions, rather than exploiting the pandemic for personal gain.
The pandemic does not provide an excuse for parties to ignore and unilaterally change their obligations pursuant to court orders and agreements. Unless a reasonable excuse applies, obligations to court order and/or agreements must be adhered to. In the event that a diversion from a current arrangement is unavoidable, again, parties should use a reasonable and common sense approach to find solutions to challenges. Affording the other party adequate notice if a change is anticipated, along with employing a solution-focussed approach, will help to avoid unnecessary
Access to the courts and the resulting delay to the progression of matters is understandably a primary concern parties may be experiencing. As such, parties can seek alternative dispute resolution solutions for discrete issues that require a timely response. Mathews Family Law and Mediation Services is available to provide interim FDR (parenting) and mediation (financial) to address such issues, with sessions that can be tailored to meet the clients particular needs, including shorter or longer sessions depending on the complexity of the issues.
We are all currently being required to adapt to changes in circumstances, whether they be working from home, or meeting with family and friends digitally as opposed to in-person. If, in a parenting matter for example, time arrangements with a parent or other person is unable to occur, rather than cancelling that time altogether, seek alternative methods to meet those obligations, such as video conferencing and/or– other digital communications. Wherever possible, engaging in honest, open and pragmatic communication with the other parent will assist in navigating the difficulties with changed circumstances.
The importance of maintaining your mental and physical wellbeing is imperative, particularly in circumstances where you are unable to do so in the manner that you are accustomed. If working from home, try to maintain a healthy balance by allocating specific work hours, taking regular breaks and establishing a dedicated workspace. Try to maintain an exercise routine – for example, following an online training class, or even taking a walk around the block.
If you would like to discuss your client’s particular interim issues and how Mathews Family Law may work with you to best assist and assure them, please contact us on (03) 9804 7991 or at email@example.com.
Oftentimes, particularly in circumstances where parties to a separation are amicable and consider that they “get along well”, spouses divide their assets according to a personal agreement – that is, an agreement negotiated personally between the parties without the use of lawyers or the Australian courts.
Such an arrangement is not legally binging, and until an agreement is documented in one of the approved manners, the agreement is considered to be an informal agreement.
One of the most significant consequences of not formalising your property settlement is the possibility that your former spouse is able to make an application for a property settlement in the future – one, two or even several years later. Being required to undertake a settlement years after your separation can have detrimental impacts on your financial and mental wellbeing and makes it difficult to plan your personal affairs. This is particularly so when as far as you knew, the matter was dealt with and is in the past.
It is important, and a principal consideration of the Australian courts, that parties finalise the financial aspects of their relationship so that they can get on with their lives.
HOW DO I FORMALISE A PROPERTY SETTLEMENT?
Australian family law affords former spouses (or parties to a de facto relationship) two ways in which they can formally finalise a property settlement. These are:
1. Making an application to the court for consent orders; or
2. Entering into a binding financial agreement (‘BFA’) (also colloquially known as a ‘pre-nup’).
To reiterate, an agreement is not legally binding unless and until it is is documented in one of these manners.
1. CONSENT ORDERS
Parties to a separation that have reached agreement about their property settlement are able to apply to the Family Court of Australia for orders to formalise the agreement so that it is legally binding. This application documents and details:
When considering an application for consent orders in respect of a property settlement, the Family Court must be satisfied that the orders proposed are just and equitable.
Although the parties are not required to obtain legal advice in relation to an application for orders, it is highly advisable that you do so, as the documents required are technical in nature, and the consequences of an agreement not being documented correctly can be costly and time consuming.
2. BINDING FINANCIAL AGREEMENTS
Parties to a marriage or de facto relationship can enter into a binding legal agreement (essentially a contract) that details the financial arrangements should their marriage or de facto relationship break down.
A binding financial agreement can be entered into:
A binding financial agreement is capable of covering:
Unlike an application for consent orders, in order for a financial agreement to be binding, both parties must seek independent legal advice as to the effect of the agreement on the rights of either party and the advantages and disadvantages thereof. Additionally, and as distinct from an application for consent orders, a binding financial agreement is not required to be deemed as just and equitable by the Australian courts.
OTHER IMPORTANT CONSIDERATIONS
You are not required to be divorced to formalise your property arrangements – in Australia, divorce is a largely administrative process and is distinct from property settlement matters.
You should also consider that when you are divorced, you have twelve months from the date that the divorce is granted to bring an application for a property settlement to the court. After this time, ‘leave’ (i.e. permission) from the courts to apply for property orders may not be granted, or may nevertheless be costly and time consuming to pursue. De facto couples have two years from the date of separation in which to apply to the court for property orders.
WHERE TO FROM HERE?
Our accredited family law specialists are available to assist in all matters pertaining to your property settlement and can advise as to the method that is most suited to your particular circumstances. If you would like to speak to one of our family law specialists about any of your family law matters, please contact us on (03) 9804 7991 or email firstname.lastname@example.org to arrange a free telephone consultation.