Our team of Wills and Estates experts provide advice in relation to wills, powers of attorney, estates and succession planning law, asset protection and estate planning; wills and testamentary trusts; trusts law; probate and letters of administration; charitable giving; not-for-profit structures; superannuation and trust disputes.
Our Expertise
- Estate planning, including the drafting of Wills and Testamentary Trusts
- Probate Applications
- Preparing Powers of Attorney (Financial, Medical, Guardianship)
- Contested estate claims and Will validity claims
- Letters of Administration
- Applications to VCAT for Administration and Guardianship
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Senior Associate
Diana Ting
Senior Associate
Genevieve Knight
Consultant
Paul Traianedes
Lawyer
Rosie Chester
Dividing your assets after a breakdown of your relationship
Everyone has their own personal experience following the breakdown of a relationship.
Below are some facts about property settlement that will arm you with important information to assist you in determining how and when you should take the first steps to move forward.
TIME LIMITATIONS APPLY
Your relationship is at an end, you feel overwhelmed. You delay dealing with the division of your assets because you don’t know where to start or who to speak to.
It’s important to understand that there are time limits within which parties must finalise financial arrangements after the breakdown of a relationship.
Parties who have been married are required to commence proceedings for property settlement within 12 months of an order for Divorce taking effect. Parties seeking to commence proceedings outside this 12-month period are required to seek the leave/ or permission of the Court.
This can add to additional cost, delay and stress.
A party to a de facto relationship must apply for property settlement within 2 years of the date of separation.
MY FORMER PARTNER AND I HAVE REACHED A “KITCHEN-TABLE” AGREEMENT. WHAT NOW?
It is important to document the terms of property settlement in a way that is legally binding. Failing to do so can lead to your financial relationship being left unfinalised. This can have flow on effects for your finances into the future.
There are two options available to parties wishing to finalise the terms of property settlement and ensure that the agreement is legally binding:
1. Obtaining Orders from the Court
Once agreement has been reached as to the terms of property division an Application may be made to the Family Court of Australia seeking that the terms reached be approved by the Court.
The Court will consider the Application “on the papers” without requiring the parties’ attendance at Court. If the Court deems the terms of your agreement to be just and equitable, the Court will formalise the terms of your agreement by approving those terms as an Order of the Court.
2. Financial Agreement
The second option available is for the parties to document the terms of the agreement reached by way of a private agreement called a Financial Agreement. Financial Agreements are not required to be filed with the Court and do not require the Courts approval.
To enter into a Financial Agreement both parties must obtain independent legal advice. The Court does have the power to set aside Financial Agreements in limited circumstances. The strength of Financial Agreements rests in both in the careful drafting of the agreement and in the parties complying with their financial disclosure obligations.
Due to the complexities involved in drafting Financial Agreements, it is imperative that parties receive legal advice in relation to which form of property settlement is most appropriate given their circumstances.
There are occasions where both options may be exercised together.
Seeking legal advice sooner rather than later
A common misconception is that the assets of the relationship/or the assets of the parties are valued at the date of separation.
For example, Question: we separated in January 2020, we are now seeking advice in March 2021, is the relevant value the value as at January 2020?
Answer = No.
The assets are in fact valued at the date that negotiations take place, or at the date upon which a Court is asked to determine the division of property between parties, not at the time of separation. It is beneficial to settle property matters sooner rather than later. Obtaining legal advice early allows parties to protect their interests and given careful consideration to relevant matters such as whether assets are likely to increase or decrease and the risk of liabilities continuing to rise.
Peace of Mind
The earlier property settlement is achieved, the sooner parties have peace of mind and the ability to move forward with financial certainty.
We can assist you with commencing this process to give you direction and confidence in moving forward with achieving property settlement.
Binding Child Support Agreement set aside as the financial impact of COVID-19 gives rise to a finding of exceptional circumstances
The financial effects of COVID-19 are being felt far and wide in our community. Many people are finding they are no longer able to sustain financial commitments they made prior to the pandemic.
The Court has recently been required to consider whether a Father’s obligation pursuant to a Binding Child Support Agreement should be set aside as a result of the significant impact the global pandemic has had on his business and in turn his income.
Martyn & Martyn [2020] FamCA 526
In the recent decision in Martyn & Martyn [2020] FamCA 526 the Court was required to consider whether a Binding Child Support Agreement (“the Agreement”), entered into in 2012, should be set aside as a result of the detrimental impact that COVID-19 had had on the income of the Father.
The Father operated a business supplying product to international companies. The total sales of his business had reduced by 90% as a result of the COVID-19 pandemic. The Father submitted that both he and his current partner were now reliant on Job Keeper and the business they operated had laid off 100 casual workers. The international and domestic border restrictions the downturn and the Father anticipated an insolvency event by September 2020.
The Mother opposed the Agreement being set aside and argued that the Agreement should be suspended to allow the impacts of COVID-19 to pass, rather than terminating the Agreement.
Binding Child Support Agreements are not easily set aside or departed from without agreement. In order to set aside a Binding Child Support Agreement, the Court is required to be satisfied of the following three matters:
In this matter the Court found that:
The Court declined to exercise its discretion to suspend the Agreement rather than set it aside as was sought by the Mother. In doing so the Court said that there was an “understandable absence of evidence as to the likely duration and impact of the COVID-19 pandemic on international commence”.
This decision highlights the devastating financial effects that the COVID-19 related restrictions have had on individuals financial circumstances and in turn the effect this has and will continue to have on the ability of people to meet their financial obligations, including payment of child support.
The Court has recently been required to consider whether a Father’s obligation pursuant to a Binding Child Support Agreement should be set aside as a result of the significant impact the global pandemic has had on his business and in turn his income.
Martyn & Martyn [2020] FamCA 526
In the recent decision in Martyn & Martyn [2020] FamCA 526 the Court was required to consider whether a Binding Child Support Agreement (“the Agreement”), entered into in 2012, should be set aside as a result of the detrimental impact that COVID-19 had had on the income of the Father.
The Father operated a business supplying product to international companies. The total sales of his business had reduced by 90% as a result of the COVID-19 pandemic. The Father submitted that both he and his current partner were now reliant on Job Keeper and the business they operated had laid off 100 casual workers. The international and domestic border restrictions the downturn and the Father anticipated an insolvency event by September 2020.
The Mother opposed the Agreement being set aside and argued that the Agreement should be suspended to allow the impacts of COVID-19 to pass, rather than terminating the Agreement.
Binding Child Support Agreements are not easily set aside or departed from without agreement. In order to set aside a Binding Child Support Agreement, the Court is required to be satisfied of the following three matters:
- That there are exceptional circumstances which relate to a party to the agreement or a child in respect of whom the agreement is made;
- That those exceptional circumstances arose after the agreement was made; and
- That the applicant or the child will suffer hardship if the agreement is not set aside.
In this matter the Court found that:
- The Father would be unable to pay child support as required by the Agreement due to his significantly reduced income;
- The COVID-19 pandemic was an exceptional circumstance; and
- If the Court did not set the Agreement aside the Father would suffer hardship.
The Court declined to exercise its discretion to suspend the Agreement rather than set it aside as was sought by the Mother. In doing so the Court said that there was an “understandable absence of evidence as to the likely duration and impact of the COVID-19 pandemic on international commence”.
This decision highlights the devastating financial effects that the COVID-19 related restrictions have had on individuals financial circumstances and in turn the effect this has and will continue to have on the ability of people to meet their financial obligations, including payment of child support.
COVID-19 Update: Getting your affairs in order
During these times of uncertainty, we have seen an unprecedented increase in Will enquiries from clients looking to ensure their affairs are in order as this global pandemic continues to evolve. However, whilst this pandemic appears to have been a driver for people to reassess their personal affairs; planning for the unexpected, for business succession and for your family should always be an ongoing process.
Life continually changes. We grow up, we work, we buy houses, businesses, shares, cars, collect things, sometimes get married, have children, sometimes get divorced, grow old, maybe see grandchildren and, yes, eventually we die. People come in and out of our lives. Our personal circumstances change, usually every five to ten years. Whilst reminders of COVID-19 are inescapable in our daily lives, unfortunately there remain many other diseases and ailments exist which can also have a significant impact on our lives. It’s best not to wait for a pandemic to reassess your personal affairs.
Taking control of your financial and personal circumstances is the first step to ensuring that your assets are protected for your loved ones in the event that you are no longer there for them. In some situations, it may simply be a case of putting an Enduring Power of Attorney in place. In other situations, it may mean making a new Will and restructuring your financial circumstances.
Whatever the concern, whatever your needs, we are here to help. We are continuing to assist clients with their estate planning needs during this time. We have a range of options in place for remote conferencing to ensure the safety and health of our clients.
If you require our assistance with your estate planning needs, please do not hesitate to contact any member of our Wills and Estates team.