Are you in the process of dividing up your assets after a divorce? The Federal Circuit and Family Court of Australia states that the duty of disclosure is a complex area of law, especially in the case of property settlements.
If you are unsure about your obligations, this article will discuss how a family lawyer will help you understand your legal rights and responsibilities.
What is Financial Disclosure for Property Settlements?
Financial disclosure is the process of providing all relevant information about your financial circumstances to another party in a family law proceeding. What does this include?
- Income (past and current)
- Bank accounts, savings, and cash holdings
- Real estate and other property interests
- Superannuation
- Shares, investments, and cryptocurrency
- Business interests and trusts
- Loans, debts, credit cards, and liabilities
- Assets disposed of or transferred in the 12 months before or after separation
Both parties are required to provide documents such as bank statements, tax returns, superannuation statements, payslips, business records, and valuations where necessary. Failure to comply can lead to serious consequences, including court penalties, adverse orders, or the reopening of a final property settlement. Everything related to your financial situation must be disclosed.
How does the family court determine your entitlements? What you are entitled to depends on a valuation of numerous factors. The court has a wide discretionary power based on the facts of each case. There are four steps which are followed in order to determine a party’s entitlement to an adjustment of their interests in theirs or their spouse’s property as a result of the breakdown of a relationship. They are as follows:
(a) Step 1: To determine whether or not it is “just and equitable” to make any adjustment to the parties’ interests in the property available for division and to identify and value all the assets, liabilities and superannuation of each spouse, that are available for division.
(b) Step 2: To consider the financial and non-financial, both direct and indirect, contributions made by and on behalf of each of you to the acquisition, conservation or improvement of property. These contributions include homemaker and parenting contributions. The Court will generally assign a percentage to each party’s contributions, for example, 50% / 50%.
Recently the Family Law Act has been amended to include that, the court will now also consider the effect of any family violence which one party to the relationship has subjected or exposed the other party to, and whether the family violence has impacted upon the ability of the party to make financial and non-financial contributions.
(c) Step 3: To consider the current and future needs of each party, including:
- The effect of any family violence to which one party has subjected or exposed the other party, including on any of the matters mentioned below;
- The age and state of health of each of you;
- The income, property and financial resources of each of you;
- Whether either of you have the care of a child/children of the relationship and require to provide appropriate housing for the child/children;
- The physical and mental capacity of each of you for appropriate gainful employment;
- The disparity in the income earning capacities of each of you;
- Commitments that are necessary for each of you to support yourself or any other person;
- Whether either of you are living with another person;
- The nature of any liabilities incurred and the circumstances relating to them.
If one party has greater future needs than the other, the court will generally make an adjustment in their favour to the percentage division nominated at step 3.
(d) Step 4: To consider whether, in all the circumstances of the case, the proposed order is ‘just and equitable (in other words “fair” according to the law).
The court goes through this process at a final hearing (a trial) and determines a property settlement after hearing each party’s evidence about contributions and adjustment factors, taking care to ensure that the property settlement order ultimately made is, taking into consideration all circumstances, just and equitable.
Why is Financial Disclosure Required in Family Law?
Disclosure promotes fairness and stops one party from gaining an unjust advantage over the other. When both parties have a clear understanding of their financial positions, a court can make decisions about property settlement, child support, or spousal maintenance.
Disclosure assists in establishing the parties property pool which is an integral step in the process. Without an accurate or complete property pool, the parties are unable to meaningfully negotiate with one another and family lawyers can be prevented from providing fulsome advice to their clients. Financial disclosure ensures that negotiations are fair, accurate, and transparent, and forms the foundation for achieving a just and equitable settlement.
During property settlement proceedings both parties are legally required to provide disclosure detailing all assets, liabilities, superannuation and financial resources they hold in their sole names, joint names, or with a third party. If you fail to provide full and frank disclosure, you risk consequences like refusing to allow you to use the document as evidence in your case, staying or dismissing all or part of your case, ordering costs against you, or fining or imprisoning you if you are found guilty of contempt of court.
Section 71B of 90RI of the Family Law Act 1975 (Cth) (for financial or property matters) and Chapter 6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (the Rules) explains your obligations. The court brochure titled, ‘Duty of Disclosure’, is a helpful summary of this, however, should be used as general information only .
Speak to a family lawyer for guidance on your case. A reputable lawyer helps you:
- Understand obligations such as full and frank disclosure
- The effect of the undertaking as to disclosure
- The terms used in the Federal Circuit and Family Court of Australia 2021 rules
What is full and frank disclosure during property or financial cases?
As well as general disclosure requirements, there are rules about full and frank disclosure. Disclosure might be part of the party’s total direct and indirect financial circumstances.
It requires the disclosure of all sources of income, interest, earnings, property (vested or contingent interests), and this applies whether the property, financial resources and earnings are owned by, come to the party directly, or go to a beneficiary such as a de facto partner, or are held in trusts, corporations or companies.
What court forms are used?
Depending on the type of orders you are seeking, you may be required to file some of the following documents:
- A Financial Statement
- An Affidavit
- A Financial Questionnaire
- A PPP Financial Summary
All of these court forms can be found here on the court’s website.
How Does Ramsden Family Law Support Your Case?
Property settlement matters are complicated, and working with a Ramsden property settlement lawyer has many benefits.
- We offer expert legal advice and a holistic evaluation of your situation. Without a lawyer, you might be overwhelmed by legal concepts you do not understand and can make errors in judgment that put you at a disadvantage.
- If your property settlement matter needs to be litigated in court. You will want a lawyer who has courtroom experience and can tactfully advocate for you.
- Local support in your time zone and an office you can visit for face-to-face meetings and support you in negotiation or dispute resolution sessions with your former partner.
- We offer fixed fees for certain work, payment plans, and are upfront with fee estimates.
- An extensive support team means our lawyers’ file load does not compromise our efficiency.
- We explore all options to explore your case without court intervention if possible.
Learn more: Navigating Parenting Arrangements Over the Festive Season.
Require a Lawyer for Property Settlement? Get in Touch
We understand how difficult and stressful it is to work out exactly what you are entitled to when your marriage or relationship ends. When it comes to divorce and property settlements, both parties walking away with a fair settlement is not always simple. This is not an exact science and is up to interpretation.
Combining decades of experience, our 15 lawyers (including 7 Law Society Accredited Specialists) offer a compassionate approach to help clients get what they are entitled to without unnecessary stress. We specifically practice family and divorce law.
For property settlement cases, Ramsden Family Law excels in addressing all family law matters and is ready to guide you through the complex process.
Whether you require a lawyer for spousal maintenance, Consent Orders, De-Facto settlements, superannuation splitting, or inheritance, contact us today to move forward without regret by phoning 1300 749 709 or emailing [email protected].
