1. Protect assets
Preserve funds
- If you have any loans with redraw facilities; funds in offset accounts or joint accounts in substantial credit, make sure that neither of you can draw or transfer funds without joint approval.
- If your spouse takes the money, it might be spent by the time you get to a court and ask for it back. In this case, the prevention is a lot better than the cure.
- Control your credit card exposure. If there’s a credit card in your joint names, or your spouse has a secondary card in your name, consider either cancelling access or restricting the limit to something that won’t hurt if it’s gone.
Review what’s in place. You may need
advice about:
- Revoking powers of attorney
- Changing Wills and superannuation fund nominations
- Lodging caveats
- Severing joint tenancies
Don’t sign any documents without consulting your lawyer.
2. It’s the pool at trial or division that is used by the judge or your solicitors
It’s a common misconception that the pool at separation is the pool divided between you and your spouse. However, you and your spouse are tied together financially until a deal is done.
There are complicating factors including:
- Post separation contributions and acquisitions
- Post separation income
- Add-backs: occasionally assets dissipated since separation are notionally added back into the pool to the disadvantage of the spouse who had the asset.
3. Who controls the entities?
You need to know who are the directors of companies, and who are the trustees and appointors of trusts. If only one of you is a director of a company, that director can terminate the other’s access to a company bank account.
The company’s constitution; the common law and the Corporations Act 2001 are the source of the director’s obligations. If one of you is the majority shareholder, under the Constitution you may be able to remove the other director and appoint yourself.
If two spouses have been running a business together, these plans about terminating access to a bank account, or removing directors, might lead to you spending a lot of money fighting about who controls the business before the property settlement. The court may force you to run it together pending a final settlement.
Assets held by Family Trusts are frequently included in the matrimonial pool and the courts have wide powers in this regard.
4. Superannuation
Superannuation is commonly included in the pool and can be split by court order or binding financial agreement. Self managed super fund breaches are serious.
- If you are a member, then you will also be a trustee of the fund, or a director of the corporate trustee of the fund. You and your spouse share the serious consequences of either of you inappropriately using the assets of that fund.
- Consider whether you should act to protect the assets of the self managed super fund.
5. Company money is not your money
If it’s in a company bank account, it may not be as simple as just taking it out and spending it. You may be creating a tax problem; you may be breaching your director’s duties or you may be ordered to repay it.
6. It’s 50/50, isn’t it?
Maybe. Your property split could be anywhere between 0-100%. It depends on contributions; prospective factors and the court’s wide discretion. But if you ask a roomful of family lawyers, they’ll often vary by 10%.
7. Documents are everything
Keep all emails between you and your spouse; keep all financial records that you may need to disclose and print or copy all financial records in which you have a legitimate interest. Do not access your spouse’s email accounts, and do not open mail directed to your spouse without authorisation.
If you have a fear that your spouse may hide assets, documents will be even more important. Do not show your partner emails between you and your solicitors. Those are privileged, and you may be making a mistake by giving up that privilege.
You and your spouse have an obligation to make full and frank disclosure of all financial documents up to the date of settlement or judgement.
Evidence is crucial, do not destroy documents.
8. Pre-nups work
They are now called binding financial agreements. You can have them before marriage, during marriage or after separation. Provided you meet the technical requirements, they are binding.
You can also have them if you live in a de facto relationship.
Your overseas pre-nup may still be relevant.
9. De facto relationships are nearly marriages
If you live with someone for two years (or have a child together, or make a substantial contribution to their assets), you may be entitled to a property adjustment.
People often disagree whether or not they were in a de facto relationship. Even if you have two households, it is possible (though unlikely) that you are in a de facto relationship with your partner.
10. Informal agreements
Paying any sum to your spouse, on the expectation that it’s to form part of their property settlement, is very unwise without legal advice. Do not assume that you and your spouse can reach an agreement that will stick, unless it’s documented by either a court order or a binding financial agreement.
These tips are about property only. Parenting disputes are as individual and unique as children and they require a more individual approach.
These are common problems and questions we receive. However, your individual circumstances should be addressed in a meeting with one of our experienced Family Law Team.
The contents of this paper are not intended to be a complete statement of the law on any subject and should not be used as a substitute for legal advice in specific fact situations. HopgoodGanim Lawyers cannot accept any liability or responsibility for loss occurring as a result of anyone acting or refraining from acting in reliance on any material contained in this paper.