18 Jul It’s not over till its over…
If your marriage or de facto relationship has ended – or is about to end – your share of the joint assets may be at risk. But fear not, you can still do something about it.
Coralee Elsum, a Family Law Specialist at Marshalls and Dent Lawyers, says many people don’t realise that typical “informal agreements” to divide property is not binding or enforceable.
“You might think everything is finalised and that the financial relationship is done and dusted,” Elsum says. “But with an informal agreement that’s just not the case. At any time your former spouse or de facto partner can seek a greater share of your assets – even many years after separation.”
Legally speaking, Elsum explains, a former spouse or de facto partner can bring an application to the Family Law Courts asking for a further adjustment and greater share of the asset pool.
“While you might think that your former partner wouldn’t do this, we have seen it happen,” she says. “It’s especially a risk when the former partner has spent the cash he or she received from the initial settlement.”
It gets worse.
Elsum warns that if you’ve purchased further assets since separation, and maybe even re-partnered, your former partner can claim against your current assets. If your assets have increased over time, your former partner might seek more than what he or she would have received from a formally documented agreement at the time of separation.
“It just goes to show that while people often think that informal settlements are easier and/or more cost effective, the risks can be high,” Elsum says.
“Dealing with a further claim from a former spouse or de facto partner long after separation is stressful and unsettling.”
So how do you know if you’re protected?
Elsum says the bottom line is that people need to formalise property settlements in one of two ways. The first approach is to prepare Consent Orders, which are lodged with and approved by the Family Court. The second approach is a Financial Agreement.
She says there are advantages and disadvantages to Consent Orders and Financial Agreements, and the best way to choose is with advice from a lawyer.
“We strongly recommend that people get family law advice about their entitlements before negotiating a property settlement,” Elsum says. “On the other hand, if you’ve already divided your assets it’s important that you revisit this and formally document the settlement by Consent Orders or a Financial Agreement.
“If you would like further advice about this, please contact us.”