Settlement Advice In Divorce

Settlement Advice In Divorce

Divorce Lawyer Sydney Settlement Advice

Settlement Advice – Divorce Lawyers Sydney

Our family home and business is in my husband’s sole name. Does this mean he gets the company and our family home during our separation and divorce because I don’t have legal ownership? 

The legal ownership of assets is a relevant issue to take into account, but does not decide how that asset will be dealt with in the family law settlement for both married and de facto couples. 

Family law takes into consideration all assets held by both parties or either of them, including the interest held by the party (or parties) in an asset which is held jointly with someone else (such as a family member or business partner).

 

The Australian Family Law Act 1975 details what must be taken into account when assessing a potential property settlement. This is supported by relevant case law. This process includes:

  • Considering whether there should be any adjustment to the current interests of the parties’ assets.
  • Identifying the assets, liabilities and financial resources in the property pool and assessing their value. This usually occurs through the exchange of disclosure documents by the parties.
  • Assessing both parties contributions to the property pool. This includes assessing financial contributions, non-financial contributions and the role of each of the parties as homemaker and parent during the relationship.
  • Assessing whether a party is entitled to an adjustment in their favour as a result of various factors, most of which relate to “future needs”.
  • Assessing whether any potential settlement or final outcome is just and equitable

Upon undertaking this process, a lawyer is likely to advise you as to your range entitlements to the property pool post separation. The range you receive is likely to be expressed as a range of percentages. Based on this advice parties should consider how to split the assets and liabilities in the property pool. This does not mean that every asset is liquidated and proceeds split in the relevant percentages, but rather that assets are divided between the parties and often a cash adjustment is required.

A very simple example of this is:

  • The parties own a home (outright) worth $900,000. They run a business through a company with an agreed value of $400,000. The both have cars (owned personally not through the company), both of which have an agreed value of $50,000. They do not have any other assets and liabilities, and so the total of their “pool” is $1,400,000.
  • The agreement is for both parties to retain 50% each, meaning both should receive a total of $700,000.
  • Party A is to retain the home and one car, a total value of $950,000.
  • Party B is to retain the company and one car, a total value of $450,000.
  • As part of the settlement Party A will need to pay Party B the sum of $250,000 to affect a 50/50% split of the pool. As is typical in the majority of cases, Party A will meet the requirement to pay Party B by way of finance against the home.

It is necessary at an early stage of settlement discussions for parties to be aware of their borrowing capacity, and often will also require advice from their accountant about potential tax implications of various options. The transfer of the family home pursuant to orders or a Financial Agreement will be exempt from stamp duty.

For further information and to talk to an expert Family Lawyer call Sarah Bevan 02 9633 1088

 

Call Now! //]]>