Dividing assets after separation can be complicated, and both practically and emotionally challenging. Some mistakes made during property settlement process can have lasting consequences. Therefore, it is important to ensure proper processes are followed to safeguard the distribution of assets fairly between parties.
Here are common mistakes to avoid during property settlement:
Failing to Disclose
Full and frank disclosure of all assets and liabilities must be made during property settlement. Without full disclosure, assets cannot be appropriately divided, and the court may even set aside a property settlement agreement and impose penalties on the party who did not adhere to disclosure requirements.
Overlooking Tax Implications
It is important to consider tax implications in relation to property settlement. Tax issues may arise, for example, in relation to the transfer of property, which may be subject to capital gains tax.
Rushing the Process
Mistakes made during property settlement negotiations can have long-term consequences. It is worthwhile taking the time to proceed through the process carefully to ensure information is accurate and all assets and liabilities are disclosed for a fair outcome.
Misvaluing Assets
It is imperative that assets are valued accurately for the division of assets to be equitable. The Family Law Act 1975 stipulates that assets including real investments, real estate, other personal property, inheritances and superannuation are to be included when dividing the asset pool. To value assets, an independent valuation may be required where parties cannot agree.
Failing to Consider Future Financial Needs
Future financial needs often forgotten about, include needs such as supporting a child, finding new housing and significant expenses of moving. These should be considered to ensure both parties have adequate provisions for the future.
Relying on Informal Agreements
Some couples agree to divide assets privately and informally. This can be problematic as these agreements are not legally binding and therefore parties are left vulnerable and unprotected if issues arise. Legally binding agreements protect both parties.
Ineffective Negotiations
It is important during negotiations to make fair offers. Fair offers from both parties increase the likelihood of reaching a fair settlement sooner and prevent negotiations from being dragged out unnecessarily and becoming costly.
Not Seeking Professional Advice
Engaging professional help is imperative to ensure a fair and reasonable outcome is reached and to ensure all procedures are adhered to. Failing to seek professional advice may have consequences for property settlement.
Property settlements require a lot of thought and can be an arduous process. It is important to seek legal advice and avoid simple mistakes.
It is important to note that other agreements, such as a pre-existing Binding Financial Agreement, may have implications on the division of assets.
Kate Scolyer – Solicitor– Matthies Lawyers
Should you wish to obtain advice regarding your family law matters, please contact Matthies Lawyers for an obligation-free consultation or call +61 3 8692 2517 today
Disclaimer: This article contains general information only and is not intended to be a substitute for obtaining legal advice