Property Settlements & Superannuation
Property Settlements and Superannuation
Our Family Law Solicitors can advise you about your property settlement following the breakdown of a marriage or de facto relationship. Property settlements involve complex percentage calculations. You only get one bite at the cherry and you should ensure that you obtain legal advice before formalising any agreement.
Step 1: Financial Disclosure
The first step in Family Law property settlement matters is for the parties to provide full and frank financial disclosure. We will assist you with identifying the documents that need to be disclosed by both you and your former spouse or partner. There are serious consequences where adequate financial disclosure has not occurred. You may be required to pay the other party’s legal fees and adverse inferences may be drawn by the Court. The duty of financial disclosure is an ongoing duty and financial documents will need to be updated throughout the duration of your matter until a settlement is reached or until a final hearing.
Step 2: Identifying and Valuing Assets
Once financial disclosure documents have been exchanged we will assist you with identifying and valuing the assets.
If asset values are not agreed this this is usually resolved by obtaining a joint valuation. The assets which are valued are anything with value, for example a family business, superannuation, shares or in some cases boats and caravans.
Step 3: Assessment of Contributions
In any Family Law property settlement there is to be an assessment of the contributions of the parties. When looking to put in place a just and equitable property settlement, as lawyers, we look to what the Court would likely do should your matter end up before a Judge for determination.
Any significant initial contributions of either party need to be factored in noting that over long relationships the inequality in initial contribution will erode over time.
The Court will look at the contributions during the relationship. The Court will recognise all contributions including financial and non-financial contributions. The role of the homemaker and parent is generally seen as a significant contribution particularly in long term relationships.
The Court will also look at any post-separation contributions that have been made by either party such as payment of mortgages and improvements to property.
Step 4: Future Needs
The Court will take into account the needs of each party moving into the future. The Court has a wide discretion and can take into account any fact or circumstance which, in the opinion of the Court, the justice of the case requires to be taken into account. The future needs of the parties may include but are not limited to:
- The age and state of health of each party;
- The income, property and financial resources of each party;
- The physical and mental capacity of either party to work in gainful employment;
- Which party has the care or control of children of the relationship that are under the age of 18 years;
- The responsibilities of either party to support themselves, a child or another person;
- The eligibility of either party to receive a government payment or pension from a superannuation fund or scheme;
- The duration of the relationship and the extent to which it has effected the earning capacity of a party; and
- Child Support paid by either party.
Step 5: Orders must be just and equitable
Judges in Family Law Property Settlement matters have a wide discretion when making final property settlement Orders. The final step undertaken by a judge is an assessment of whether or not the Orders are just and equitable. In some previously decided cases, judges have found that it has not been just and equitable to make any Orders at all.
Step 6: Negotiating a Settlement
Negotiations can be done in a number of ways including but not limited to:
- Written negotiations;
- Mediations; and
- Informal meetings.
In Family Law matters generally each party will pay their own legal fees. In the event that your matter proceeds to Court and is unable to be resolved between you and the other party without Court intervention, there is a risk that an Order may be made by the Court providing for you to pay the other party’s costs if an Offer of Settlement has been rejected by you that was a better result for you than the final Orders made by the judge.
All formal negotiations should be set out clearly in written correspondence to protect yourself against any potential future arguments about costs Orders.
Step 7: Formalisation of Settlement
In the event that you and the other party are able to reach an agreement about the division of assets and debts, it is of utmost importance that the agreement be documented appropriately. Without formally documenting the agreement, you leave yourself exposed to a potential claim in the future from the other party.
A property settlement agreement can be documented by Consent Orders or a Binding Financial Agreement. Consent Orders are generally the preferred method of formalisation as Binding Financial Agreements are more often being overturned by the Courts. Binding Financial Agreements are a contract between the parties that is not approved by the Court. Both parties to a Binding Financial Agreement must be legally represented.
For Consent Orders to be made it is not necessary that both parties be legally represented. It is advisable that a lawyer draft the proposed Orders to avoid any problems with execution of the Orders in the future. The Application and proposed Consent Orders are forwarded to the Court and when making the Orders the Court must be satisfied that the agreement that has been reached is just and equitable before the Orders are made.
Superannuation forms part of the pool of assets to be divided in Family Law property settlement matters. In some circumstances superannuation is one of the larger sized assets of the relationship. It may be that your property settlement will include a superannuation split in favour of you or the other party. There are strict rules for procedural fairness to be provided to the superannuation fund and the proposed splitting Orders must be worded carefully to ensure that there are no problems with the execution of the split.
In certain limited circumstances our firm offer a payment on settlement arrangement if you are expecting to receive a payment from the settlement and cannot afford to pay your legal fees over the duration of your matter.
If you would like to meet with our Family Law Solicitors simply call our office to arrange a FREE one hour consultation.