In this Article we address some of the critical issues you need to be aware of when considering property settlement, or advising clients about property settlements, in the current climate.
If you have already commenced proceedings in the Family Court, a practical issue of importance is that the Court has recently advised us that apart from trials; all hearings and attendances should now be conducted by phone.
Consequently, if you have an upcoming hearing in the Family Court including a conciliation conference for property or a case assessment conference for parenting, you should be working with your family lawyer to file requests to attend those hearings by telephone.
If you are self-represented, we encourage you to take independent legal advice to assist you to attend at those hearings by telephone effectively.
With the health pandemic status, and resulting economic impacts changing on a daily basis, we are receiving many questions about what are the relevant and appropriate steps to take concerning property settlement, in the current financial climate.
Importantly, there are time periods which are applicable to all property settlements and these remain unchanged by COVID-19. In the case of married couples, you have 12 months from your divorce to commence proceedings in the Family Court. In the case of de-facto couples, you have 24 months from the date of your separation to commence proceedings. These time periods remain operational today, and if you are approaching the end of that 12 or 24 month period, it is critical that you seek advice about the steps that must be taken by you, even in these uncertain times.
If you have not yet commenced proceedings in the Family Court, and are negotiating a property settlement, or if you are advising a client who is in the throes of negotiating a property settlement with their former partner, what is critical is that you have a current and updated asset pool – with the values of assets, liabilities and resources updated to account for recent events. Continue to update those values, where practicable. Further, it is important that you consider you future economic need, in the event that your employment may be temporarily or permanently affected. We suggest contacting your accountant or financial advisor to discuss these issues, and also your family lawyer.
Continuing negotiations on the basis of asset pools previously agreed or understandings about future capacity for employment, and not taking into account the increase or decrease in value of that property or impact on your income, is likely to be problematic and may result in enforcement issues which have a consequential cost, delay and frustration to you.
If you are negotiating a property settlement or assisting a client in that regard, please ensure you are doing so with updated financial information and a regard for their future needs in the current economic climate. If you require advice about this, please contact us.
If you are involved in property proceedings in the Family Court, there are a number of issues to consider. Asset pool changes, the form of orders and in particular how superannuation orders should be drafted, and also what applications may need to be made taking account of what are no doubt significant changes to financial circumstances.
It is likely that in the coming weeks or months, you will need to prepare an updated financial statement so that the Court has updated evidence of your financial circumstances, and any change to your position as a result of the COVID-19 crisis. This is important in a number of ways. Namely if the value of your interest in a business has changed, this is relevant for overall property settlement. If your income has varied, this is relevant to spousal maintenance issues and other considerations, and if you are bound by an order that you pay spousal maintenance but no longer are in receipt of the income you previously had access too, it may be that a variation application need be made. It is critical that you work with your family lawyer to consider what steps need be taken to apprise the other side of your or your client’s revised financial circumstances, so that negotiations about relevant matters can continue on a proper footing or applications made to the Family Court can be actioned.
Superannuation splitting orders are a common tool utilised for property settlements for married or formerly married couples. This is a very specific area of law and if you are contemplating a superannuation splitting order, we recommend contacting a family lawyer. This is because superannuation orders can be crafted in a number of ways, and given the significant reductions to the share market, it may not be appropriate to agre on a superannuation split for a specific amount in the current climate. A percentage allocation of a superannuation may be more appropriate, but whether that is the case will depend on your individual circumstances and this is why advice about this issue is important.
If you have final property orders which are yet to be implemented, or have had an interim hearing or trial but are yet to receive a judgement and orders, it may be that steps need to be taken to bring the matter back before the Court if there has been a significant change to the financial circumstances. If the final property order is now unworkable, please contact an accredited family lawyer to discuss whether there is sufficient merit for the Court to consider setting those orders aside. If you have had a hearing and are yet to receive a judgment about that financial issue, please contact your family lawyer or seek advice, to discuss whether it is appropriate to seek to provide further and updated financial evidence to the Court.
As a practical step, if you are facing hardship, contact your bank to discuss options, so that any Court intervention can be minimised, and legal cost to you and your former spouse similarly minimised.
The takeaway is that we are all in unchartered territory, and this is why it is critical for individuals to take advice about the considerations which are relevant to them. We are available to provide that advice to you in a number of ways including by telephone, or by utilising services such as zoom conferencing and skype, depending on your individual needs and technological prowess.
We hope that everyone stays safe, and please contact us if you require our assistance in any way.
VIDEO UPDATE: Kerr Fels Family Law COVID-19: PROPERTY & FINANCIAL SETTLEMENTS
Please contact Kerr Fels on (08) 6381 9080 to make an appointment for specific advice about your situation. The information in this article is of a general nature and should not be relied upon for your family law matter.
About KERR FELS – Divorce and Family Lawyers
Kerr Fels is a boutique law firm practising exclusively in family and divorce law. We offer experience in settling complex financial matters arising from separation involving business entities, trusts and large asset pools, in addition to negotiating simple divorces. We are conveniently located in the Perth CBD.
Our philosophy is to provide client-focused cost effective, efficient and pragmatic legal advice. Don’t hesitate to contact us if you need advice about separation or divorce.
P: (08) 6381 9080
A: Level 26, AMP Tower, 140 St Georges Terrace, Perth, WA.