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valuations


Contact Armstrong Legal:
Sydney: (02) 9261 4555
Melbourne: (03) 9620 2777
Brisbane: (07) 3229 4448
Canberra: (02) 6288 1100

Amelia-Trotman

Where you are able to agree as to the value of any assets and liabilities, you should do so, even if this means exchanging market appraisals or using online valuation services to assist you in doing so.

If you are unable to reach an agreement as to the value of any asset or assets, the court may appoint a valuer to do so and you may be required to share the costs of obtaining that valuation report. Often such valuation reports fall outside of the range that is considered to be reasonable by the parties. This is particularly the case with household furniture which is valued at its second-hand value, such as that may be obtained in a garage sale or on eBay. All assets are valued at their second-hand value obtainable in the market, not their current replacement costs.

Capital gains tax

When considering the outcome of your property settlement you should give some thought to the capital gains tax ("CGT") liability that may arise or be transferred between you and your partner as a result of the court orders. Where an asset is required to be sold by a court order, the sale of that asset may be the trigger for a CGT liability. Where an asset is transferred from either the other party or joint names, any CGT liability that attaches to that asset will be transferred with that asset to the party receiving it. The party receiving that asset will be solely responsible for any CGT liability that arises upon sale of that asset.

The court will make an allowance for CGT payable in circumstances where:

  • The court orders the sale of the asset; or
  • The court is satisfied that the sale of an asset is invertible or will probably occur in the near future.

You should seek the assistance of your accountant or a financial advisor in relation to the taxation consequences of your property settlement to make sure that you fully understand what it is that you are likely to receive.

Limitation period

Any application for property settlement or spousal maintenance should be made within 12 months of the date of your divorce being filed. You will need to ask the court for permission to bring an application after this time.

Staying in or leaving the home

In property matters there is little legal advantage in staying in or leaving the family home. The advantage is more a practical advantage in relation to keeping control of the family home in circumstances where it is required to be sold or it you want to retain it at the conclusion of your matter.

By being in the home you are able to control the presentation and marketing of the home to prospective purchases. You are required to pay all outgoings of the name once your spouse leaves the home, including mortgage payments.

If you are planning to retain the home at the conclusion of the proceedings it is legally significant as to whether or not you have remained living in the home throughout the proceedings. If both parties wish to retain the former matrimonial home the party that has remained in possession of the home is more likely to be able to retain it.

In parenting matters, remaining in the former matrimonial home is significant in that it provides a familiar environment and setting for the children whether they are living with you or spending time with you. Particularly in situations where it is in dispute where the children will live, retaining the former matrimonial home can be a significant strategic advantage.

We are aware the breakdown of a relationship can be difficult to remain under one roof and we understand that it may be necessary to leave, however, if you are able to remain in the home we would recommend you do so.

Trusts

Determining whether or not someone has an interest in a trust and the value of any such interest is one of the more complex issues facing the Family Court when determining the maker of the net asset pool.

In order to determine the nature of the interest of a party under a trust, the court will consider the trust deed, if any, and the relevant factual circumstances giving rights to the trust. If you have control over the distributions paid or likely to be paid from the trust then the interest in the trust is likely to be considered property by the court and part of the net asset pool. Other factors the court has historically looked at to determine whether or not a party has control over a trust include the following:

  • The benefits derived from the trust;
  • The history of the parties treatment of the trust property;
  • The history of distributions made by the trust;
  • Any power exercised by a party including variations to the trustee;
  • The degree of affiliation between the trustee, the appointer and beneficiaries; and
  • The capacity for you or to borrow funds from the trust.

Please provide us with a copy of any trust deeds and any other documents which you may have in relation to trust interests, including minutes of meeting, bank records, taxation returns, any records of distribution etc so that we can assess the significance of those documents and any trust interests.

If the court determines that the trust property is available for distribution between the parties, then ordinarily the court has, pursuant to Section 90 AC of the Family Law Act 1975, wide powers to deal with the property notwithstanding its legal ownership. However, we note that where there are sufficient assets to provide a just and equitable property settlement without dealing with the trust property the court will usually exercise the option of allocating those assets, as far as it is possible to do so, to affect a just and equitable property settlement before disturbing the trust.

Distributions from trusts

It is important that we obtain a copy of any documents showing the history of distributions from any trust. The more regular and consistent those distributions have been over time, the greater likelihood that the court will determine that those distributions are likely to continue after the finalisation of the property settlement. Accordingly the court is likely to treat those distributions and any interest in the trust as a financial resource to be taken into account when determining the appropriate orders to make in finalising the property settlement.

Interim costs

Our clients are often unable to make immediate payment of our costs and disbursements. If there are sufficient liquid funds available, we can make an application to the court for an interim release of funds on account of legal costs to adequately prepare the case.

The Succession Act 2006

The Succession Act 2006 provides for former defactos and former spouses to bring a claim against the estate of the other in the event of the death. The Succession Act 2006 provides that a deed of release can be entered into between parties who may be entitled to make such a claim to prevent either of them from making a claim in the future. We normally recommend that a deed of release be entered into between the two parties  in order to prevent such future claim against our clients' estates.

Your will and any power of attorney

The provisions of your will are affected by divorce in that your spouse will no longer be entitled to receive any provision you have made for them under your will, however, in order to make sure that your estate is dealt with in accordance with your specific intentions you should consider giving us instructions to update your will upon your separation and again upon your divorce.

You should also consider whether or not any power of attorneys held by your spouse or other people who may be loyal to your spouse, should be revoked.

Time frames

In circumstances where you come to an agreement concerning your dispute, we can formalise that agreement, by the making of court orders or a financial agreement, usually within six to eight weeks. In some cases that period may be significantly less if everyone is prompt in fulfilling their role to bring the agreement to a conclusion.

If the matter is litigated and requires an interim hearing on any particular issue, the current period of delay to obtain an interim hearing date is approximately four to six weeks.

From the time of filing an application for the court to litigate your dispute, the average delay by the court is currently 2-2½ years. Matters requiring urgent attention can be expedited, but must be considered exceptional in nature.



where to next?

Taking the next step and contacting a family lawyer can be scary. Our lawyers will make you feel comfortable so you can talk about your situation. But first, ask yourself, Do I really need a lawyer?

Why Choose Armstrong Legal?

Contact Armstrong Legal:
Sydney: (02) 9261 4555
Melbourne: (03) 9620 2777
Brisbane: (07) 3229 4448
Canberra: (02) 6288 1100

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