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    Uncovering Concealed Assets in Divorce Proceedings 1000 634 Dorter

    Uncovering Concealed Assets in Divorce Proceedings

    A divorce can create a lot of challenges, with one of the most contentious aspects being the division of assets. Uncovering concealed assets can significantly impact the property settlement, and understanding the intricacies of this issue can make all the difference in achieving a fair outcome.

    In this article, we will explore the concept of hidden assets in a divorce, common methods of concealment, the legal framework, detecting hidden assets, and the steps to take if you suspect your spouse of hiding assets. We will also delve into the consequences of hiding assets in a divorce and provide preventative measures to protect your assets legally.

    What does it mean to hide assets?

    If a party is accused of holding hidden assets, usually it is asserted that the party is not being candid or is deliberately attempting to avoid demonstrating their true financial circumstances. There are various reasons why a spouse might hide assets, including:

    • Protecting assets from being divided in the divorce settlement
    • Minimising the amount of spousal support or child support they may have to pay
    • Avoiding taxes or other financial obligations

    Each spouse is obligated to provide the other with information and documents pertaining to their financial circumstances during the property settlement process. This is the case for matters which are litigated in Court and matters which are resolved by agreement.

    Concealing assets in a divorce is prohibited and considered immoral, as it affects the asset pool to be divided. There may be significant consequences for a party if they are found to have concealed assets.

    Common Ways Assets Are Hidden

    Some common techniques employed to disguise assets include:

    • Understating income
    • Exaggerating liabilities
    • Transferring assets to third parties
    • Utilising offshore or overseas accounts/investments
    • Using hard currency/cash

    For instance, a spouse might transfer a significant amount of money to a family member or friend, claiming it to be a loan repayment. Loan repayments to family and friends are frequently contested in family law matters. Once the property settlement is finalised, the money could be immediately transferred back to the spouse who initially concealed it as part of the financial settlement.

    Disclosure

    In Australian family law, both parties are obliged to provide a full disclosure of their assets, liabilities, superannuation, and financial resources during the property settlement process. The court determines the primary documents that must be produced, and additional disclosure may be necessary depending on the particular matters or areas of disagreement.

    The purpose of financial disclosure is to ascertain and confirm the financial standing of each party and validate the financial standing of their former spouse. A frank disclosure of assets is crucial, as concealing assets can result in considerable legal repercussions.

    Detecting Hidden Assets

    If you suspect your spouse is hiding assets, there are several strategies you can employ to uncover them. For the purpose of proper due diligence, parties involved in property settlement disputes should:

    Family lawyers, forensic accountants, and private investigators can also be invaluable resources in detecting hidden assets. Some ways they can help include:

    • Forensic accountants examine financial documents to identify discrepancies and possibly undisclosed resources.
    • Private investigators can gather evidence and conduct surveillance.
    • Family lawyers can navigate the legal process and obtain court orders if necessary to access certain financial records or documents.

    What to Do If You Suspect Your Spouse is Hiding Assets

    Should you have suspicions about your spouse hiding assets, it’s advisable to promptly consult a legal professional. An experienced family lawyer can assist you in examining bank statements and financial statements to help investigate any concealed assets and financial resources. Furthermore, your legal advisor can provide direction on suitable measures to address your concerns, such as initiating legal proceedings and seeking remedies.

    By seeking legal advice early, you can better protect your interests and ensure a fair settlement in the property division process.

    Consequences of Hiding Assets in Divorce

    Hiding assets can lead to significant legal consequences, such as costs orders, findings of contempt and in some circumstances, even imprisonment. Financial repercussions may also occur, with the court potentially revisiting the property settlement and imposing penalties if additional assets are discovered after the settlement has been finalised. A property settlement obtained by fraud can be set aside by the Court after the making of Orders.

    Furthermore, hiding assets during divorce can negatively impact one’s reputation, reflecting a lack of trustworthiness and honesty. Honesty and transparency during the property settlement process are not only key to a fair outcome but also to preserving your credibility and reputation over time.

    Preventative Measures and protecting Your Assets Legally

    One way to protect your assets legally and prevent potential disputes over hidden assets is to enter into a prenuptial agreement or a binding financial agreement (BFA). These legally binding agreements delineate how assets will be distributed in the eventuality of a divorce or separation and can provide a level of certainty and security for both parties.

    However, keep in mind that Courts can set aside legally binding agreements under certain circumstances, like if the agreement was signed under duress, if there was misinformation, or obtained by fraud. To ensure the enforceability of your agreement, seek legal advice from a family lawyer with expertise in drafting and reviewing such agreements.

    Summary

    Having an experienced family lawyer, experienced in understanding and locating hidden assets in divorce proceedings is essential for ensuring a fair property settlement. Our experienced family lawyers are experienced in dealing with complex property matters where assets have been hidden and know the steps to take if you suspect your spouse is hiding assets. Our expert family lawyers can help protect your interests and achieve an equitable outcome. The consequences of hiding assets in divorce can be severe, both legally and financially, and can damage one’s reputation. By engaging in preventative measures, such as prenuptial agreements or BFAs, and seeking legal advice from experienced family lawyers, you can safeguard your assets and navigate the complexities of property settlements with confidence.

    We Can Help You

    If you have recently separated and you are concerned about achieving a fair outcome or you suspect that your spouse may be hiding assets, we can help you.

    Our experienced family law team will work closely with you to understand and assess your situation and then plan a course of action that will ensure you receive a fair property settlement. Our many years of experience in dealing with high value property settlement proceedings means that we’re well-versed in the methods people may use to hide assets as well as the signs of misinformation.

    You can put your trust in our family law team. Call us on 02 9929 8840 or book a consultation online here.

    How is a Business Divided in a Divorce? 1024 631 Dorter

    How is a Business Divided in a Divorce?

    When a couple divorces or separates, a property settlement, also known as the division of assets, is almost always necessary.

    In some cases, this process will involve assets like a home, cars, money, and superannuation and in other cases, it may involve complex and highly valuable assets, such as a business.

    In this article, we’re going to discuss how a property settlement involving a business should be handled, including the various steps that should be taken.

    Property Settlements and Businesses

    The breakdown of a marriage or de facto relationship can have a significant impact on a business. Whether both parties to the relationship own the business or it is owned by one party only, the future of the business could be impacted as the business is considered part of the marital property pool.

    It’s important to be aware that the breakdown of a relationship where a business is involved could impact not only the couple, but also any other owners of the business, as well as anyone else with an interest in the business.

    What happens to the business when a couple breaks up?

    As we touched on above, it doesn’t matter whether the business is owned by one party or both parties to the relationship – in most situations, it is considered to be an asset that could be divided in the property settlement.

    The way assets, property and liabilities are divided in a property settlement involves a 4-step process. These steps are:

    1. Identify all assets and liabilities – during this step the value of the business will need to be identified.
    2. Step 2: Identify the contributions of all parties – contributions can be financial and non-financial, as well as direct and indirect. Even if one party never worked in the business, their contributions to the relationship could make them entitled to a percentage of the business.
    3. Step 3: Work out the future needs of each party – factors such as parenting, health and age can impact the future needs of each party.
    4. Step 4: Review the agreement – the property settlement agreement must be just and equitable.

    Identifying the assets in step one is particularly important and it also involves valuing them too. In the case of valuing a business, this can be complex as many factors determine the value of a business. This can also be an area of contention for separating couples, so it is highly recommended that a professional business valuation expert is engaged to avoid disputes arising.

    The aim of these steps is to work out the percentage of the overall property pool that each party is entitled to.

    Who actually gets the business in a property settlement?

    The way assets are split can be complex and will differ from situation to situation. When it comes to a business, there are many different outcomes that could occur.

    One potential option is that the one former spouse buys out the other spouse’s interest in the business. Another option is that the business is split, with each party receiving part of the business. Selling the business to third party and splitting the proceeds in the property settlement is another option. If there is agreement, there are certain circumstances where former spouses could continue to own and operate the business as is.

    The right option is dependent on the unique factors of your situation and the type of business operated. In some cases, the former spouses may have an amicable relationship where their split hasn’t interrupted the business operations, while in other cases, there has been a significant loss of trust and it’s not possible to come to an agreement.

    It’s best to seek legal advice before making a decision regarding a business in a property settlement as there can be long-term consequences of these decisions that could be overlooked.

    What if the former spouses cannot reach an agreement for their property settlement?

    The family law system in Australia has been designed to allow people to reach agreements together or to use other resources to avoid having to go through Court proceedings. However, while the system allows for this, it’s not always possible to come to agreements, and in matters that involve complex property and assets, like a business, Court intervention may be necessary.

    In this scenario, the parties apply to the Federal Circuit and Family Court of Australia for a property division. The Court will use the same 4-step process we outlined earlier to determine an appropriate split of assets and liabilities, including the business. It’s important to note that the Court may require that an independent valuation of the business takes place where the parties cannot agree on the value.

    As a property settlement is meant to be a way to finalise the financial relationship or sever the financial ties of the former spouses, the Court will be likely to make a decision where one person may receive the business while the other receives other assets that equate to their share of the assets and property, or if this is not possible, the Court may order that the business is to be sold. The aim will be to not only finalise the financial relationship but also to ensure that the property settlement is just and equitable.

    Can you protect a business?

    Protecting a business from being impacted by a relationship breakdown is possible, however, it is highly recommended that a lawyer is engaged.

    Whether you’re considering marriage or in a relationship and own a business, or you’re considering starting a business while in a relationship or marriage, there are various options available to you. A binding financial agreement that outlines how assets are managed in the event of a relationship breakdown is one of these options.

    As many unique factors are at play with relationships and businesses, we highly recommend seeking legal advice if you wish to protect your business or any other asset.

    Talk to our property settlement family lawyers

    If you’ve separated and are having difficulties in determining a property settlement agreement or you’re wanting to protect your assets, talk to our property settlement family lawyers today.

    Our experienced legal team is here to offer advice, guidance and representation for all types of family law matters, including complex property settlements.

    Call us today on 02 9100 0437 or book a no obligation consultation here.

    Multiple Jurisdictions 1024 683 Dorter

    Multiple Jurisdictions

    Litigation of issues across multiple jurisdictions involving the same subject matter and parties is becoming increasingly common, particularly in family law. It will often involve a careful analysis of which jurisdiction or Court is preferred and consideration of whether the issues or proceedings can be transferred or consolidated.

    In a family law context it is becoming more common to see third parties, such as Mum or Dad or grandparents, seek repayment of monies they may have advanced to one or both parties or an argument that real estate is held “on trust” for a third party following separation. In these situations a third party may assert certain legal rights to pursue repayment of monies or declarations that the third party is the beneficial owner (real owner) of real estate. What follows is that multiple jurisdictions (or Courts) may have the jurisdiction to decide the issue e.g. Federal Circuit and Family Court of Australia and Supreme Court of New South Wales. Our previous article on “Accrued Jurisdiction” provides an overview on such jurisdiction existing between different Courts and can be found here – What is Jurisdiction and Accrued Jurisdiction?.

    In these circumstances it is necessary to seek specialist advice about:

      1. Which jurisdiction (or Court) may be preferred to determine the issue;

      2. Whether the issue can be cross-vested, or transferred, between jurisdictions (or Courts);

      3. When and how to apply for a transfer of proceedings;

      4. How to deal with different Judicial Officers in different Courts; and

      5. What to do if the transfer does not succeed.

    Dorter Family Lawyers and Mediators specialises in family law disputes that involve multiple areas of jurisdiction and/or multiple Courts. If you require any assistance with the above we can assist.

    This post is an overview only and should not be considered as legal advice.  If there are any matters that you would like us to advise you on, then please contact us on (02) 9929 8840.

    Andrew Johnson
    Partner

    Rebekah Dorter
    Principal

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    The Duty of Disclosure 1024 575 Dorter

    The Duty of Disclosure

    Do I have to Disclose?

    The answer is… Yes!

    We are often asked by our clients what they must disclose in their family law matter after they have separated from their partner and what their former partner is obligated to disclose.

    Both parties to a marriage or de-facto relationship are required to provide full and frank disclosure of information relevant to their financial circumstances. This means parties must provide each other with all information relevant to an issue in their case, including information recorded in a paper document or stored by some other means such as a computer storage device and also includes documents that the other party may not know about.

    This duty of disclosure is a positive duty imposed by the Family Law Rules and the Federal Circuit Court Rules and is quite different to the obligations parties may have in a commercial dispute.

    What does disclosure involve?

    As part of your disclosure obligations, common documents required are those that evidence the following: –

    1. All income or earnings (whether paid directly to the party or not);
    2. Any interests in any ‘property’ or entity fully or partially owned or controlled by the party;
    3. All financial resources, including interests in a trust;
    4. Any disposal by the party that may affect, defeat or deplete a party’s claim; and
    5. All liabilities of the party or of any relevant entity.

    ‘Property’ for the purpose of a family law settlement is not just real property but is a much broader concept and means all assets, including superannuation.

    When does your duty to disclose begin?

    Your duty to disclose begins once you separate (with the pre-action procedures) which means before a case starts, and this duty continues until the case is finished. The duty of disclosure is an ongoing obligation and extends to all documents in your possession, power or control.

    Your duty to disclose continues until your matter is finalised which means that you must continue to provide such information as your circumstances change or more documents are created or come into your possession, power or control.

    What happens if a party to a case does not disclose?

    There are a number of consequences which may follow if a party to a case fails to disclose, including but not limited to cost orders, and if a matter has been finalised the settlement may be re-opened if the non-disclosure resulted in a detriment to the other party.

    It is important to provide disclosure in a timely matter, and to be honest and forthcoming with your disclosure documents. Non-disclosure contributes to significant delays in resolving a family law matter and significantly increases costs.

    We can help you

    Dorter Family Lawyers and Mediators offer specialist family law advice in Milsons Point on Sydney’s Lower North Shore, and are available to assist you with any questions you may have about child support.  Please get in touch with us on (02) 9929 8840 or hello@dorterfamilylawyers.com

    Rebekah Dorter
    Principal

    This post is an overview only and should not be considered as legal advice.  If there are any matters that you would like us to advise you on, then please contact us.

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    COVID-19 & Financial Support 1024 683 Dorter

    COVID-19 & Financial Support

    COVID-19 & Financial Support – How do I get it?

    Financial support from your former spouse or partner in family law matters, referred to as ‘maintenance’, is nothing new. However, the COVID-19 pandemic is creating a challenging environment for households – financial uncertainty, job losses and illness. We are often approached for urgent advice from many clients asking about their legal right to financial assistance in these circumstances.

    Maintenance

    If you require financial support and your former partner can assist you financially, but is not willing to do so, our Family Law system can help.

    Recently, where a former spouse refused to provide financial support we assisted by successfully obtaining an Order from the Family Court for our client to be paid an amount each week from her former husband, with that payment to continue indefinitely until a Final Hearing. The benefit of that Order to our client (and her child) in the present financial climate is significant.

    Do you have a ‘NEED’?

    In determining what Order, if any, should be made, the Court is required to consider firstly the need of the party seeking the financial assistance. Some relevant factors include:-

    1. What income the party receives? Importantly, the Court is unable to take into account an income tested pension, allowance or benefit;
    2. What expenses are incurred, such as weekly costs for food, a motor vehicle, telephone, entertainment costs, children’s costs, gym, health and beauty, holidays and the like;
    3. Whether the party was financially supported by the other party during the relationship;
    4. Whether the party has the care of children, or another person;
    5. The age and health of the party;
    6. Whether the party is able to work greater hours, or re-enter the workforce if they have had time away from paid employment during the relationship;
    7. A standard of living that in all the circumstances is reasonable.

    If the Court is satisfied that from these factors that the party has a need for financial assistance, it is then required to consider whether the other party has the capacity to pay”.

    Capacity to pay

    The Court will make an assessment of a party’s capacity to pay” based on the financial obligations of that party. When considering a party’s financial obligations, or their capacity to pay, the Court may take into account a number of factors, including:

    1. Their property, income from all sources and their financial resources available;
    2. The use to which that person is applying their income;
    3. The factors listed above, including their age, health and whether they have the care of children or another person.

    When considering a party’s expenses the Court can make an assessment as to the reasonableness of those expenses. For example, the Family Court found in favour of our client, awarding her a certain amount in maintenance week, as the Court found that our client‘s  former spouse was applying income towards new or unnecessary expenses to keep funds out of reach of our client, by paying for renovations and depositing additional funds into the mortgage.

    Fairness

    Ultimately, the Family Court is required to make orders which are fair, or just and equitablein the circumstances.

    Each family, and each separation, is unique.  It is important that you obtain expert Family Law advice when you separate or divorce in order to obtain your best outcome and settlement, and an outcome which is fair.

    Mediation or Court?

    Our team of Family Law experts will assist you, providing you with strategic, expert and timely advice.

    The majority of family law disputes fortunately settle without Court intervention. If an agreement cannot be reached between couples the alternatives available include:

    1. Mediation;
    2. Arbitration; and
    3. Collaboration between Lawyers.

    If you require assistance, we are available using a number of platforms – telephone, Skype, Zoom, Teams, Facetime.

    Otherwise, please contact Dorter Family Lawyers and Mediators on (02) 9929 8840 or mail@inst1045122-8984.ozhosting.com for a confidential discussion.

    Dorter Family Lawyers and Mediators offers expert family law advice in McMahons Point on Sydney’s Lower North Shore.

    Andrew Johnson

    Senior Associate

    Rebekah Dorter 

    Principal

    This post is an overview only and should not be considered as legal advice.  If there are any matters that you would like us to advise you on, then please contact us.

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    Binding Financial Agreements and How to Set them Aside 1024 684 Dorter

    Binding Financial Agreements and How to Set them Aside

    Have you entered into a Binding Financial Agreement (BFA) that is outdated or is unfair?

    In certain circumstances, the laws in Australia may enable a party to receive a just and equitable property settlement, if permitted by the Court.

    Recent Decision

    In October 2019, in the decision of Westacott & Dunwoody (No. 2) [2019] FAMCA 719, Dorter Family Lawyers and Mediators successfully set aside a BFA on the grounds that it would have been unjust and inequitable to not uphold the Termination Agreement the parties had entered into on separation. Dorter Family Lawyers represented the Husband who is now able to seek a property division that will be just and equitable under the Family Law.

    The Husband sought to set aside a BFA entered into by both the Husband and the Wife in 2005. In 2018, the parties entered into a Termination Agreement which enabled the parties to enter into Consent Orders for a final property settlement with terms different to their original BFA.

    The Wife later sought for the Termination Agreement to be set aside, and to uphold the BFA on the grounds that the Husband did not obtain the required independent legal advice when entering into the Termination Agreement.

    The Court found that since the making of the BFA, the Wife had made various payments to the Husband which were consistent with the Termination Agreement and inconsistent with the BFA. Accordingly, the Court found that it would be unjust and inequitable for the Termination Agreement to not be upheld and therefore, declared the Termination Agreement binding, which effectively terminated the BFA.

    What is a BFA?

    A BFA, or commonly known as a ‘Prenup,’ is an agreement entered into by two parties to a relationship which sets out how, in the event of a relationship breakdown, the parties’ financial affairs and property will be dealt with. You can enter into a BFA prior to being married or engaged, during a de facto relationship or marriage, or after a divorce.

    Provided that all the legal requirements are satisfied when entering into the BFA, you and your partner will be bound by the terms of the agreement. As a result, you do not need to approach the Court for a final determination of your property settlement in the event your relationship breaks down.

    Is your BFA Binding?

    Before you consider setting aside your BFA, the Court will consider whether your BFA is binding.

    Under the Family Law Act 1975 (Cth) (“the Act”), a financial agreement is only binding if you and your partner each satisfy the following:

    1. The agreement is signed by each party;
    2. Before signing the agreement, independent legal advice is obtained by each party in relation to the effect of the agreement and the advantages and disadvantages of the agreement;
    3. Each party obtains a statement signed by their legal practitioner stating that this advice was provided; and
    4. Neither party has terminated the agreement and the agreement has not been set aside by the Court.

    If one or more of the above has not been satisfied, you may not be bound by your BFA. You may then be entitled to seek a property settlement that would be considered just and equitable under the Family Law.

    Terminating the BFA

    If both you and your partner no longer wish to be bound by your BFA, you may terminate the agreement by entering into a further BFA terminating the first agreement, or by entering into a ‘Termination Agreement’. These are the only two options available to terminate the agreement in accordance with the Act and you should obtain legal advice about how to do this.

    Before signing a Termination Agreement, each party must obtain independent legal advice to understand their rights and to understand the advantages and disadvantages of making the Termination Agreement.

    Setting aside the BFA

    If the parties have not terminated their BFA and a party wishes to set aside the BFA, the Court must be satisfied of one of the following grounds:

    1. The agreement was obtained by fraud;
    2. The purpose of the agreement was to defraud or defeat a creditor or the other party;
    3. The agreement was made with reckless disregard to creditors or the other party;
    4. The purpose of the agreement was to defeat an interest of the other party;
    5. The agreement is void, voidable or unenforceable;
    6. Circumstances have arisen to make the agreement impracticable to be carried out;
    7. Since the making of the agreement, there has been material changes which involve the care, welfare and development of a child and the party who is responsible for the child will suffer hardship if the BFA is not set aside; or
    8. A party engaged in unconscionable conduct when making the agreement.

    Application of Rules of Contract

    A BFA, being a contract, is subject to the laws of contract and legal advice should be obtained to ensure your BFA also complies with the laws of contracts.

    Simplifying the laws of contract, the BFA may be voidable or unenforceable if:

    1. One party repudiates the contract by showing that they no longer wish to be bound by the contract and the other party chooses to rescind the contract; or
    2. One party intentionally waives their right to enforce the contract or abandons the contract by acting in a way that is totally inconsistent with the contract.

    FAQs

    1. Do I have to go to Court to set the BFA aside?

    Unfortunately, to set a BFA aside, you will need an order of the Court if the other party does not agree to mediate and reach agreement. If both parties agree to not be bound by a BFA, a Termination Agreement should be completed in accordance with the Family Law Act.

    2. What if the BFA does not deal with all of the property in the event of separation or divorce?

    Part or all of the BFA may become uncertain and therefore unenforceable. This will depend on the terms of the clause considered in the context of the BFA entirely.

    3. Can the BFA include a parenting agreement?

    These clauses will not be binding and cannot be enforced. The best way to deal with parenting is through Consent Parenting Orders.

    4. Can the BFA include a parenting agreement? 

    The Court will still have jurisdiction to deal with spouse maintenance in accordance with the Family Law.

    Each party’s circumstances are unique and legal advice should be obtained from a family lawyer who specialises in such agreements if you seek to rely upon or set aside a BFA.

    If you require assistance, please contact Dorter Family Lawyers and Mediators on (02) 9929 8840 or via email on hello@inst1045122-8984.ozhosting.com.