Separated? Why you should get an agreement before it’s too late
Mr Holland left it too late. He was separated and didn’t get family law advice or didn’t act on his family law advice and paid for not getting an agreement drawn up and formalised.
Let his sad story be a lesson to us all in reaching and formalising a property settlement agreement promptly after separation.
It’s my inheritance – Mr Holland inherits
Mr H separated.
He didn’t negotiate with his ex.
His brother died and 3.5 years after separation, he inherited a house worth about $715,000 from the estate.
Then his ex wanted to do property division/settlement. They couldn’t agree. Mr H wanted to exclude his inheritance. They couldn’t agree. The matter went to court. The first time in court, the property was excluded as an asset from division by the judge, but it was said that that Mr H had a financial resource that wasn’t available to Mrs H.
Will the inheritance be considered?
The joint pool, without the inheritance was $373,000. Mrs H was awarded 62% of that. The adjustment was for income earning disparity and because the court considered the inheritance house a financial resource. Mr H was to get the remaining 38% and keep his inheritance.
Wife appeals
Mrs H didn’t like that decision and she appealed. What we learn from the appeal case is that:
- Property acquired after separation is not immune from inclusion in the property pool available for distribution to the other side;
- No-one needs to show that the post-separation property represented any particular contribution of either party;
- How the property was acquired, utilised, improved or preserved may be relevant to the following questions:
1. Should an order be made at all?
2. Should contributions be assessed globally, or asset by asset?
3. What is the nature and extent of each party’s contributions?
The appeal court said, you can’t just exclude property that a party has an interest in, be in legal or equitable (ask us about discretionary trusts). The first judge could have assessed the inheritance separately and then found that the wife had no claim. But the judge shouldn’t have excluded it altogether from division and then decided it was a financial resource.
The appeal court decided the first decision was wrong and sent the matter back to have another trial.
Lesson – resolve and document your family law agreement
So, separate and move on properly – sort out your property settlement. When you come to an agreement you should document that properly.
If you don’t do it right, what you make and receive after separation will all be looked at by the Court.
If you don’t know how, come and talk to us.
If you’ve come into money at any time in your relationship and want to know how it might be viewed, make an appointment to discuss with Jane.
And if you want to read about Mr Holland, his sad tale is here: http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FamCAFC/2017/166.html