Four Important Facts You Need to Know About Settlement

Courtney Barton 1. What is a Property Settlement?

When a marriage or a de facto relationship ends, the parties should always finalise their financial ties with one another.  This may involve the transfer of ownership of real estate, cash, superannuation or other property from one party to another.  For example, if the matrimonial home is in joint names the parties may agree that the house be sold and the proceeds divided. Alternatively, the parties may agree that one party receives the house and makes a cash payment of some nature to the other party to ‘buy out’ their interest.

When you are separating, it is important to obtain legal advice from a Solicitor specialising in family law, in order to determine your entitlements.

2. How do I formalise our property settlement?

Any agreement reached between you and your former partner should always be formalised (recorded legally).

There are two ways of recording a property settlement agreement between two separated parties:

  1. A Consent Order; or a
  2. Binding Financial Agreement.

A Consent Order is an Order which both parties have agreed to and the Family Court approves before making the Order, to ensure it is just and equitable.

A Binding Financial Agreement is an agreement between parties which has not been scrutinised by a Court to ensure it is just and equitable however the parties must consult with a Solicitor to make the agreement valid.

You should talk to your Solicitor about which form of agreement is right for you.

3. Why is it important to formalise your property settlement?

There are several reasons:

  • A Consent Order & Binding Financial Agreement are legally binding. This means that if the other party does not comply with the agreement, you have recourse to the Court to enforce compliance of the agreement.
  •  It finalises your financial relationship with your former partner. This means that your former partner cannot make a further property settlement claim against you.

4. Why is it important to do your property settlement promptly after you separate?

If you do not finalise your property settlement promptly after separation, this means your financial ties with one another have not been severed and you leave yourself open to a property settlement claim being made against you in the future, subject to relevant time limitations.

The value of the asset pool is not the date of separation it is when you make an agreement or when a Judge determines your matter.

This means that if your super interest increases, or you acquire a new asset or you improve the value of an asset post separation, but prior to a property settlement, it forms part of the property pool to be split between you and your former partner.

You should not leave yourself open to your improved superannuation entitlements,  or assets acquired/improved by you post separation,  forming part of your  property settlement.

Alternatively, if your former partner sells an asset or wastes away funds in the property pool, post separation, and applies the income for his/her own benefit, the property pool is reduced therefore reducing your entitlements. This is because the Court cannot deal with assets that no longer exist.

The only caveat to the above is that the Court has discretion to take into account financial contributions of the parties or wastage of matrimonial assets post separation.

It  is in your interests to formalise your property settlement sooner rather than later so that you can re-establish your financial position without a potential property settlement application hanging over your head in the future depending on time limitations.

Be careful of the promises you make….

PropertyA recent judgment handed down by the Supreme Court of South Australia has highlighted the dangers that exist in making rash promises, particularly where family members are concerned.

In Rodda v. Rodda, the Supreme Court of South Australia found that a son was entitled to a proprietary interest in the family farming business and properties as a result of promises that had been made many years earlier that the family farm would one day be his. The trial judge accepted evidence of the son that he had worked on the family farm for 18 years accepting a relatively low wage in the expectation that he would one day benefit from taking over the family business. He had conducted renovations to a house on the farm at his own expense and had not pursued any other career or form of self-employment because of the expectation that he would eventually take over the farming operations.

When the relationship between father and son broke down in 2002, the father attempted to deny the son any interest in the property and claimed that the family business was still owed $135,000.00 by the son for a loan that had been given some years earlier.

At the end of the day, the court found that the representations and promises had been made and that based on those assurances, the son had continued to work in the family business, not sought any alternate career, had expended his own time, money and energy in improving the property and had done so as a consequence of the inducements that had been made. Accordingly, it was found that it would be inequitable for the son to be denied a proprietary interest in the property.

Whilst the case is a rather extreme example, it serves as a reminder of the need to be careful about what you promise and to ensure that any commercial arrangement is well documented, less there be no misunderstanding.

Travis Schultz
Practice Group Leader
Schultz Toomey O’Brien Lawyers, Part of the Slater & Gordon Group
Ph: (07) 5413 8900
Fax: (07) 5413 8958

No Binding Contract With High Class Escort

ContractThe recent dismissal of an appeal by “high class escort”, Madison Ashton, in the New South Wales Court of Appeal should be a salient reminder to those of us in business of the need to ensure that any contract we enter into is properly constituted, and recorded, so as to enable it to be enforced.

At issue in the case of Madison Ashton, were promises that were allegedly made to her by billionaire cardboard king, Richard Pratt, before he died. Ms Ashton alleged in her claim that she had been promised financial support if she remained his mistress, even though nothing was ever put in writing or signed by the parties.

The New South Wales Court of Appeal found that any promises of financial support did not create a binding contract and would, in any event, have been void as being against public policy. It was found that the arrangement between the late billionaire and his mistress failed to spell out important terms that would be required in order for there to be a contract (assuming that one could exist without being void on public policy grounds), such as the duration of the arrangement and how the promised trust to provide financial support would be created.

Whilst the case may be a somewhat extreme example of the difficulties in proving an oral contract, it highlights the need for contracting parties to:-

  • Ensure that there is agreement reached on all important terms;
  • To ensure that there is “consideration” for the exchange of promises in the form of money or money’s worth;
  • Preferably, to then ensure that there is some documentary record of the agreement which demonstrates that the parties have in fact reached agreement and intend that the arrangement be legally binding.

A simple promise, on its own, will not necessarily create a binding legal relationship, but if terms are set out in writing and signed by the parties, then there is a far greater prospect that a Court will enforce a contract if ever becomes necessary to do so.

Bikie jailed over threats made to ex-partner and her son

jailA bikie will spend at least 2 years behind bars after threatening to kill his ex-partner and her young son while they slept. The man spent six-months terrorising her and her son, despite an intervention order being in place to protect the woman.

The couple separated in September last year after a 13 year relationship and he had already served time in jail for breaching intervention orders against her.

“I’m going to f—ing cave your head in and don’t think people will stop me,” he told her on one occasion in front of dozens of witnesses.

“Your days are numbered,” he told her in one and warned her to “order a coffin” in another.

The man is a serious violent offender with a history dating back to 1997.

He pleaded guilty to more than a dozen charges which include unlawful assault, criminal damage and threat to kill.

Is social media ruining your relationship?

Is Social Media Ruining Your Relationship?A study has shown that continual heavy use of the social media platform Twitter, can lead to conflict in marriage and romantic relationships.

Research was conducted and has suggested that the the use of other social media platforms including Facebook and the use of social media in general had an effect on relationships.

The study appeared in the journal “Cyberpsychology, Behavior, and Social Networking” which was written by University of Missouri doctoral researcher Russell Clayton. Clayton’s research was also published in the journal last year which found that Facebook usage was associated with “negative relationship outcomes”.

In a statement made by the journal’s editor-in-chief Brenda Wiederhold she said “these findings highlight the need for more study on social network use. Since much of the social networking research is in its infancy, we do not know if other media, such as Instagram, will also impact relationships in a negative way.”

Do you agree with the above study and that social media – Twitter and Facebook are affecting our relationships?

If you have experiencing a family situation, please contact our team of Family Lawyers.stolaw.com.au or 1300 STOLAW

What is family violence?

Family violence is when any one person in a relationship uses abuse or violence to gain and maintain control over another. It can occur in current or past family, domestic or intimate relationships. When people think of violence they think of physical injury however, violence can include direct and indirect threats, sexual assault, emotional and psychological torment, economic control, damage to property, social isolation and behaviour in which causes the other person to live in fear.

The below “Power and Control Wheel” provides an example family violence.

power and control wheel

 

Image source: http://www.womenscouncil.com.au/what-is-domestic–family-violence.html

If you need assistance regarding a family issue please contact our Family Law team today.

A Victim of Domestic Violence

A lady by the name of Jaquie Lait was a victim of domestic violence. She was in and out of hospital for months and months, sometimes returning only hours after being discharged with further injuries. When Jaquie was pregnant she was told by doctors that she had a 50% chance of surviving the birth of her child due to the prolonged physical abuse that has been sustained to her body. She didn’t want her child to be bought up without a mother. This is when Jaquie made the most important decision to remove herself from the abusive relationship.

Jaquie started a new life by moving to Toowoomba and after nine years of being out of the terrible situation, she found a love for fighting and now helps many others at the domestic violence wing of Fighters Against Child Abuse Australia.

Remember domestic abuse doesn’t always come in the form of physical abuse, it can also include:

  • Verbal – constant put-downs, name calling etc.
  • Sexual – any forced or unwanted sexual contact/activity etc.
  • Social – controlling where you go, who you see, geographically isolating you.
  • Financial – being refused/denied access to money etc.
  • Damage to property – kicking a hole in the wall, scratching your car etc.
  • Psychological – behaviour and/or comments to undermine your sense of self etc.
  • Spiritual/Cultural – not allowing you to practice your chosen religion or cultural beliefs.
  • Stalking – worrying or frightening you by watching, phoning or following you. Stalking is a crime.

If you have been or are the victim of domestic abuse, contact us for assistance today. We have a professional team who are here to help you.

(Source: Sunshine Coast Daily 2014, http://www.sunshinecoastdaily.com.au)

Divorce – Helping your children cope

You know the relationship is over and now you have to tell the children. When is the right time? Should you both be there? How much do you tell them? These are some of the hard questions I get asked on a regular basis, often by understandably distressed parents. A colleague of mine Dr Bob Jacobs, who is a trained psychologist regularly conducts seminars for us and he has a wonderful insight into how parents can help their children through a time when their world appears to be crumbling around them. In this column I thought I would share some of Dr Bob’s thoughts from a recent seminar:

1) Do not expose children to conflict
If there are problems on “change-overs” figure out a better way to handle them. If phone calls inevitably lead to conflict resolve not to talk when the children are around.

2) Prioritise your own emotional stability
Take care of yourself. Your children will know if you are struggling and it makes them fearful and insecure.

3) Maintain logistical stability
Keep things as “normal” as possible in the children’s routine. Any continuity in a child’s life is a real blessing for him at this time when the world is turning upside down.

4) Don’t say anything bad about the other parent
This one is self explanatory.

5) Tell the truth
Children always need to trust their parents and this is never truer than when everyone is going through the trauma of separation. This doesn’t mean tell them everything but it does mean not to tell them things that aren’t true.

6) Use the three-part response to difficult statements

  • Ask the child how it made him feel (prioritise the child’s feeling, not your reaction).
  • Tell the child how much you love her.
  • If the child still wants to know WHY it was said, tell him you don’t know.

7) Do not ask questions about the other parent
This puts a child in a very difficult position. If you need to know ask your former partner when your child isn’t around, but never use your child as a source of information.

8) Celebrate and support the other parent as much as you can
This isn’t easy, but it can be an amazing gift for your child. If your child brings up something that happened with the other parent you can truly be excited about it. If you can send something to the other parent with the child, such as a school photo, it is a huge gift for the child (to see the cooperation). Remember your gift is for your child, not for your ex.