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property matters

Family Law and the Bank of Mum and Dad

It’s common for modern entrants into the property market to have had some assistance getting there. You might have heard of the term ‘the Bank of Mum and Dad’ to refer to when parents or family members have assisted someone in helping with a deposit on a property. But how does this new type of Bank stack up when it comes to a separation with your partner?

Family law has long adopted a presumption about money coming from family members, called the presumption of advancement. In brief, that presumption says that where there is an intra-family transfer (a payment from your mother to you for example), then that is presumed to be a gift. If there is evidence to the contrary, then the presumption can be rebutted.

What does it take to rebut the presumption of advancement? There are competing schools of thought and arguments about this. One line of reasoning says that if you intended something to be a loan, then you would have all the regular features of a loan – a contract entered into before the money was transferred, terms of repayment, interest payable, the ability for whoever loaned the money to ‘call in’ the debt, and even registering an interest by way of a charge or sometimes a mortgage.

However another line of reasoning, advanced particularly in the Supreme Court of NSW, has said that family members are simply unlikely to adopt such formalities in their intra-family relations, but that this shouldn’t stop a Court taking a view that money transferred was a loan, not a gift. That is, that the level of formality about a loan in a family is going to be lower than if the Commonwealth Bank, for example, loans you some money.

These questions turn on evidence, and your conduct with the money, particularly before you separated. If you separate, and suddenly start treating money as being a loan and paying interest, it certainly looks suspicious if that’s not what was happening before. Patterns of conduct are important, as are formal documents being prepared at the time of the loan, particularly with documents showing that a partner or former partner knew exactly what was going on.

It’s easy to say all this in hindsight, but our lawyers are experts at asking you the right questions to help find the evidence that you might need to argue a loan – and if you cannot, giving you the right advice early to help you avoid going down the wrong path.

Call us now on 03 9614 7111 or email melbourne@nevettford.com.au to find out more.

Significance of Abiding by Property Orders

Significance of Abiding by Property Orders

It is vitally important for parties in proceedings to strictly comply with property settlement Orders.

If a Court Order required you to make a cash payment to the other party in the proceeding by a certain date, you should avoid making a late payment given the potential risks and negative impact involved to your case.

For example, in the case of Blackwell & Scott [2017] FamCAFC 77 a Consent Order provided that the Husband is to pay the Wife $130,000 within 90 days (so as to achieve an equal property division). The Husband was late in making the payment by approximately 13 months and over this period, the value of the property increased in value from $860,000 to $1 million. The Wife argued that the Order should be set aside as the increase meant that she would receive far less than an equal division of assets. The Family Court Judge granted her application. The Husband filed an Appeal which the Full Court dismissed noting that “The Husband’s delay in complying with the Orders was… substantial… By reason of the Husband’s default, the agreed equal division of the parties’ property did not take place”.

On the same note, it is equally important to ensure that you abide by Court Orders requiring you to maintain properties, or demonstrate that you are able to keep up with expenses involved – as otherwise you might face a serious risk of sale.

For example, in the case of Narkis & Narkis [2018] FamCA 1083 Consent Orders were made for the Wife to pay expenses for the said property including land tax, building insurance premium, and expenses relating to repairs. The Wife, unfortunately, left the land tax bill unpaid and outstanding for seven months. The Wife failed to provide an explanation for her non-compliance. Though the Wife ultimately paid the bill, she had deposed to the fact that she had borrowed funds from friends to pay outstanding expenses, which the Court found concerning. The Judge found that the Wife had ample opportunity to do what she was obliged to do. The Judge further noted that the Wife’s indication that she had to borrow monies points to the fact that she does not have the resources to keep this property. In all these circumstances, the Judge found that it was just and equitable to make Orders for the sale of the said properties.

In short, it is important that you engage a lawyer who sees the bigger picture and able to assist you in understanding exactly what you are signing up for to avoid a costly enforcement Application being made against you. Our lawyers at Nevett Ford Melbourne are fully across these issues and will be able to provide you with the advice you need to get the outcome that is appropriate. Call us on 03 9614 7111, or email us out of hours on melbourne@nevettford.com.au to discuss your circumstances or for more information.

Forever young? Valuations and family law

The valuation of assets is a critical part of family law property settlements and divisions. Lawyers and clients are not usually property value experts, whether in the industry of real estate, businesses, cars or jewellery. You would be surprised how many people suddenly decide that they are experts in this field when they separate from their long-term partner! As a result, independent property valuations are commonly obtained when disputes arise about the precise value of items of property. But are those values, once obtained, set in stone

It is not unusual for valuations to be updated as a result of the passage of time – a property valuation that is two years old may not accurately reflect the current value. In what appears to be an uncertain real estate market at present, a valuation obtained even a few months ago may be able to be challenged based on new information and changes in market conditions. Business valuations also have a significant amount of complexity – sometimes it is best to obtain historic valuations of businesses ‘as at separation’ because of conduct by a party that has had the result of diminishing the value. It is extremely common for business owners to claim that their business has suddenly faced a downturn immediately after separation and the Court is increasingly sceptical about such claims, and so historic valuations may well be appropriate or useful to the Court. If you are on the other side of this equation though, an insistence on the current value may well be much more in your interests.

 

In short, you should engage a lawyer who is alive to these issues rather than blindly follows a set structure or path for every case. Tailored, specific advice is invaluable, and is something that we offer at Nevett Ford Melbourne. Call us on 9614 7111 to discuss your circumstances.

Who stays in the home?

When your Ex Won’t Move Out…..

There are times when both parties wish to remain in the family home post separation.  You may feel you have a greater right to remain in the home; maybe it was your home prior to the relationship or marriage.  You perhaps made greater financial contributions to the home or have primary care of the children, or you simply may have nowhere else to go nor the financial resources to leave.

Whatever the reason in the event of family law separation both parties are legally entitled to live in the family home.  It does not matter whose name is on the ownership of the house. 

If you leave the house, you do not lose your rights to a share of the house, or other property. You can also legally protect your interest in the family home if your name is not on the title by placing a caveat on the property which registers your interest in it.

You cannot be forced to leave the property at the mere demand of the other party in the absence of safety concerns.   If there are no safety concerns, no court orders have been breached, the removal of one party from the residence cannot even be enforced by the police.

Can you change the locks?

It is generally not advisable to change the locks as a tool to evict a party from the property, in addition to increasing the acrimony between the parties it can also reflect poorly in any subsequent court proceedings.

If the property is owned by one party, that party has the right to change the locks, if it is jointly owned then both parties are able to change the locks.  If the property is being leased then the landlord should be consulted about the lock change.   Even if the party who is remaining in the property is not the legal owner, it can nonetheless be justifiable for them to change the locks if the other party has moved out and has removed their possessions.  It is argued that the remaining party is entitled to the peaceful enjoyment of their residence, similar to that of a tenant.

How can I get my partner to leave?

To legally force your partner to leave the home and stay out, you will need to obtain an exclusive occupancy order from the court.  These orders are usually only made in circumstances involving threats, domestic violence and/or safety concerns for one of the parties or their children or whether the children are being exposed to parental conflict.  

We would need to explore the pitfalls of remaining in the home with your former spouse – weight it up against what you want to achieve by remaining in the property and is there a better option for you.  For example, if the costs of establishing a new household is a deterrent, we may need to consider whether an application for urgent or interim maintenance to fund relocation would be appropriate.

Can I take the children with me?

You can take the children with you if there are concerns about your safety and the children’s safety.  However, if you want to move away with the children and the move makes it difficult for the other parent to see them you need to try to get agreement first.

If you are afraid to try to get the other parent’s agreement and are worried about your safety, we can speak to you about your options.

If your former partner refuses to vacate the home or wish to discuss your options prior to separation and your matter generally, you should contact our office to make an appointment on 9614 7111.

Divorcing Over 50 – The Grey Divorce

Do you stay in a marriage that is over or risk financial ruin for happiness?  Unless you are a highly evolved Zen master your divorce is likely to “suck” – most do.

Getting divorced at any age is difficult. Everyone wants their marriage to work however divorcing later in life presents unique challenges and being newly single can be terrifying.   It is sometimes thought people “your age” are not supposed to get divorced.

If you are divorcing after 50, chances are your children may be teenagers or older. Their reaction may be unfavourable and even hostile. Be prepared to help older children cope with the divorce.  It’s also important to monitor your children’s feelings. Your kids may be older, but don’t assume it’s easier on them than it would be if they were younger.   You may choose to end your role as husband or wife, but your role as mother or father does not end. Handling your divorce process with your children in mind provides opportunities to share in their lives without the tension.

The financial consequences of a divorce can be significantly more damaging for older divorcing couples.  You may have dedicated your entire life to the family and marriage and have no professional skills of any kind. You have have been hard at work earning good money to support a family that now you feel has disappeared.  You may even already be retired, your assets fairly fixed and your employment opportunities may be limited.  There are now two households to support. 

An amicable divorce process will limit the cost of suffering financially and emotionally.  As difficult as dealing with all of these issues will be, one of the most significant impacts that divorce over 50 will have on your life is the inevitable financial strain.  The equitable division of assets and liabilities is a concern in almost all divorces and generally the older you are the more complicated your finances have likely become.

Given the typical level of assets and complexities it is important that you get legal advice, but doing so doesn’t mean you have to go to battle. No matter what kind of grey divorce you may be facing you have the power to choose how you handle it and we can assist you accomplish a more comprehensive and cost-effective dissolution of your marriage.   Even if your split is amicable it is important to seek your own legal advice early on.

Call or email us now for advice from one of our experienced and knowledgeable lawyers.

Family law Courts to be restructured, given new name

The Federal government announced today its intention to combine the existing two-Court federal family court system in Australia into one, larger Federal Circuit and Family Court of Australia (“FCFCA”) commencing 1 January 2019.

What does this mean for you though? Currently, there are two Courts, one that is the ‘higher’ Court – the Family Court deals with complex property matters, serious allegations of child abuse or  particularly serious parenting arguments, International parenting matters and protracted disputes; and the Federal Circuit Court deals with the bulk of family law matters.

At present, your lawyer has to decide which Court you ‘belong’ in when starting your case. It is often not easy to know this at the first stage, and choosing the wrong Court may mean that you are sent between Courts while this is clarified or when new issues arise. Additionally, starting Court proceedings for property disputes in the Family Court is currently ‘easier’ than in the Federal Circuit Court, as you are not required to file an affidavit in support of your application at first. Drafting a good, comprehensive and accurate affidavit in support of your case can be time-consuming (and costly) and so it is a quick option for lawyers in a rush to simply go to the Family Court even if the property case is not otherwise complex enough to justify being in that Court.

The combined Court will mean a single point of entry for all matters, which will then be directed in the right place. This might be considered a bit like ‘triage’ that a hospital might conduct, prioritising and assessing cases as they come in and linking them with services, hopefully sooner than they would be otherwise.

The additional factor to consider in the government’s announcement is that appeals from the FCFCA will no longer be dealt with by an appeals section of the Family Court, but will be dealt with in a new division of the Federal Court of Australia. What does this mean? Family law judges in the Family Court who currently spend time hearing appeals will be available to hear cases from the start, potentially meaning more front-line resources in terms of time and Judges.

Of course, at present this is just an announcement. Once the government releases its proposal in more details, we will be able to assess how effective this might be at clearing some of the delays currently affecting the family law system.

Protect Your Family’s Investment

Many people choose to invest in property in Australia for their retirement, as a source of income, or to assist their children with somewhere to live. This is true of both local buyers and overseas purchasers. When you do this however, you should turn your mind to how Australian family law will consider this type property in the event that there is a separation involving yourself or your children in the future.

If a parent buys a property for their child, their child marries and then divorces, it is not as simple for the parents as getting their money back out of the property ‘dollar for dollar’. Australian family law will usually consider this assistance from a parent a type of financial contribution, not a loan, and is not inclined to repay the money as if it were a normal debt. Often people will walk away from a relationship having lost not only a lot of money themselves, but also a lot of their family’s money, resulting in increased family tension.

At Nevett Ford Lawyers, our large and experienced team advise and assist with a range of solutions to help to protect you and your family in these situations. When you purchase a property, we recommend considering a Binding Financial Agreement under the Family Law Act to protect yourself and your children, as well as ensuring loan documents are drafted to assist in recovering money if necessary. We are also able to draft Inheritance Agreements to help to protect inheritances from family law disputes in the future. We can even draft Agreements that will operate for couples who are not yet married but may do so in the future and want to make just one document to cover these different situations.

It is important to look at these types of documents and have them prepared when everything is going well, to protect you in the event of future uncertainty. Determining the right kind of document for your circumstances is a skill at which our lawyers excel, and we recommend you contact us to enable you to make this important decision in an informed manner. Our number is 03 9614 7111, or email us out of hours on melbourne@nevettford.com.au