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How do I protect our assets after separation?

Tuesday 10th of March 2020
By: Kate Trajcevski, Special Counsel and Accredited Family Law Specialist, Coote Family Lawyers

Your firm was simply terrific through what was a very stressful time.

It is often the case that one party has more knowledge about, and control over, the relationship assets.  If a separation is acrimonious, a party may attempt to move an asset out of the reach of the other party, or at least threaten to do so.  

This is not acceptable and the Family Court has wide ranging powers to undo or prevent an attempt by one party to defeat the other party's claim for a property division.

What are "our assets"?

It is important to understand that having legal ownership over an asset does not automatically provide the owner the right to deal with an asset as they please after separation.  All assets, liabilities and resources (including superannuation and trust assets) in the possession, power or control of a party to a relationship forms a part of the property available for division between the parties pursuant to the Family Law Act.

What is a transaction to defeat a claim?

Examples might include a party:

  1. "Selling" a property to their parents for less than market value
  2. Transferring shares in their business' company to a partner for no consideration
  3. Securing a mortgage against their home to a sibling without a genuine loan

The Family Court has the power to reverse such transactions after they have occurred or restrain a party from entering into such a transaction prior. 

Even if a party enters into such a transaction without malice, the Court may still set aside the transaction or restrain the party.  

The Court does, however, have to consider the rights of genuine third-party purchasers, which may mean that the Court does not exercise its discretion to stop or reverse the transaction.  It is therefore always more sensible to take proactive steps to protect your assets where possible, and rely on the Court's powers as a last resort.

Protect your assets

  1. Hold your assets jointly from the outset.  It goes without saying that if you are legally a part owner of an asset, you will have more control.  This is not always possible or appropriate of course.
  2. Be included in decision making and stay informed.  Not all relationships are the same, but it is generally appropriate for both parties to the relationship to know what they own and how it is held.  Your accountant is usually a great person to provide you information.  Talk to your bank and ensure that the proper authorities are in place for jointly held accounts.
  3. Lodge a Caveat. If you hold a caveatable interest over a real property, you might lodge a caveat so that you are notified of any new mortgages, or attempts to transfer a property.  Caveatable interests are a nuanced area of the law, and having a right to a property division under the Family Law Act does not of itself provide you with a caveatable interest.

If you are concerned that your partner might act to move an asset out of your reach to defeat your claim to a property division, moving quickly is imperative.  You should obtain advice from a competent solicitor practicing in family law as soon as possible.  The more time that has passed the more difficult it can be to deal with such a transaction.

The team at Coote Family Lawyers are recognised as being the best divorce lawyers in Melbourne.  Please call us on 03 9804 0035.

 

 




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