Family Law Article - Former Partner in a Now Defunct Relationship Attempts Property Settlement Proceedings
This article comes from the family law team at Hatzis Lawyers BrisbaneA situation that we are seeing more commonly is where a former partner in a now defunct relationship is attempting to institute property settlement proceedings long after separation has occurred.
A common misconception amongst people is that if there is no property when the parties separate then there is no necessity to finalise a property settlement.
The problem here is that although there may be minimal assets at the time of separation this does not mean that there are no assets. Parties will often have motor vehicles, superannuation, furniture, jewellery, cash in bank accounts, shares, and all of these items are considered to be property under the Family Law Act.
True Scenario number one:
Husband and Wife divorce in 2000
Wife keeps the car and the furniture worth $10,000.00. The Husband pays out the debts of $7,000.00 and retains his superannuation of $21,000.00.
Husband remarries in 2004 and purchases a home with his new wife in 2005.
In 2005 the ex-wife makes an application to the court for a share of the husband's superannuation and his new house .
Husband spends over $8,000.00 in legal fees to defend the claim of his ex-wife.
True Scenario number two:
Husband and wife divorce in 2000
Husband has received a large personal injury claim payout and leaves wife shortly thereafter. Part of the personal injuries claim included gratuitous care given by the wife, and during the marriage the wife paid the entire legal fees for the claim.
Husband then buys business with new partner and runs the business for 5 years. Husband sells the business to go on a trip around Australia.
Wife applies for an injunction to freeze the sale proceeds of the business pending final resolution of the matter due to her interest and belief that it was purchased from proceeds realised through the sale of the former matrimonial property.
Husband now has to defend the ex-wife's claim on his business.
The lesson to be learnt in these scenarios is that where property exists at the time of separation, be it large or small, it is far more cost effective to deal with property settlement at that time.
Even when the parties are simply retaining their superannuation it is well worth the peace of mind to finalise property settlement matters there and then to prevent such situations occurring.
Property that either party acquires after separation can be subject to a claim by the other party. If the court has no record that a property settlement has occurred between the parties and you purchase property, you may find yourself having to provide evidence in relation to how you purchased the property and whether any matrimonial funds were used to purchase that property.
If matrimonial funds have been used then the property becomes part of the matrimonial assets to be distributed between the parties. Any increase in the value of the property will also be shared between the parties.
The moral of the story is to finalise matters quickly and efficiently at the beginning of your separation to give yourself peace of mind and to end things financially once and for all between the parties.
The only way to finalise property settlement is by way of a binding financial agreement or consent orders. The cheapest part of a legal transaction is at the beginning.
Please call our friendly family law team at Hatzis Lawyers for information in relation to consent orders and the associated fees
If you need any family law assistance in Brisbane, please email us and we can send out a family law pack to you.
Alternatively, you can call us on (07) 3345 4388 to give us an opportunity to serve you
Hatzis Lawyers are a dynamic firm of Brisbane lawyers and solicitors contributing their might to the smart state of Queensland.