When a marriage or a de facto relationship breaks down, many experience disbelief, confusion and anxiousness. This is understandable and it may be hard to find the mental space to prepare the paperwork for the separation and divorce.
Furthermore, separating spouses may play hardball, refuse to provide their financial details, inflate liabilities or siphon off and hide their money. This can result in a drawn-out divorce process and be highly challenging. Unfortunately, a lack of preparation may have a negative impact as you may lack the necessary evidence to put your best case forward. Hence, to protect your interest and to reach a satisfactory outcome, it is vital where possible to be prepared before a separation is triggered or quickly after the breakup has occurred.
This article offers an insight of the actionable steps you can take to be prepared for the process of dividing the assets of the relationship with your spouse and for court action, if this is required to split the assets. These steps will help to reduce your legal costs in the divorce process.
1.Prepare a list of assets and liabilities
All assets of the parties whether held jointly or in the sole name of one spouse will fall in the pool of assets for division. This will include the portion of an asset held by a spouse with a third party such as a parent, sibling or business associate. Assets for division will cover bank accounts, real estate, shares, vehicles, superannuation, businesses and any other asset of value to the parties. Some assets are held in a company or trust structure. This often includes Self-Managed Superannuation Funds (SMSF) and trust or corporate structures to hold businesses and investments. As long as a spouse has an interest in the corporate or trust structure, it also falls within the pool for division.
If your parenting matter is in court, you may have been referred to a DR Conference, or sometimes you have just separated and receive an invitation to attend a Legal Aid DR Conference, but what is a DR Conference?
In short, it is a mediation session that is organised by Legal Aid WA and which is held at their office.
Both you and the other parties in the matter will be allocated a lawyer, by Legal Aid WA.
A mediation date will be set and all parties, including an Independent Children’s lawyer (if appointed), will be present at the mediation. The mediation runs for about 3-4 hours.
Before the mediation, you will have some time to prepare your proposals and ask your lawyer questions about the mediation and what to expect.
Legal Aid WA also carry out mediations for financial disputes, if your matter meets the criteria. In the appropriate case, you can directly apply to Legal Aid WA for a mediation on your financial matters.
If you have separated from your spouse and wish to apply for a divorce, you would need to consider whether you are eligible to file for a divorce in Australia and the steps required to commence and complete divorce proceedings.
What is divorce in Australia?
When the term “Divorce” is used in family law matters in Australia, it refers to the legal process of terminating the marriage. Separation alone does not terminate the marriage. In order for a marriage to be officially terminated, the court must issue a “Divorce Order”.
Besides divorce, a separated married couple would also have to address how their property and finances are to be divided and if there are children, how the care of their children is to be resolved.
How does divorce work in Perth, Western Australia?
It does not matter whether you wish to apply for a divorce in Perth or in any other Australian state or territory. Family law applies similarly throughout Australia. State law does not apply to divorces. Instead, federal legislation known as the Family Law Act 1975 applies. Hence, the law on divorce is the same throughout Australia.
However, you need to ensure the court you file your divorce application has jurisdiction to hear your matter.
Separating from your spouse is not only a highly stressful and difficult time emotionally but can also be exceptionally hard on the pocket. Splitting a single household into two is never an easy task in the best of times. According to a report by the Australian Broadcasting Corporation posted on its website on 15 July 2024 (https://www.abc.net.au/news/2024-07-15/couples-delay-official-divorce-due-to-cost-of-living-pressures/104086442), it appears that in today’s cost of living crisis, separating couples are choosing to delay making an application for divorce due to financial pressures.
This brings up the question whether a separating spouse needs to appoint a lawyer to assist in making an application for divorce or can he or she self-represent in relation to the divorce application so as to save legal costs.
The short answer is that there is no requirement under the law for any party to the marriage to be represented by a lawyer when making an application for divorce.
Therefore, you can prepare and file the divorce application yourself and if a divorce hearing is required, you can be self-represented at the divorce hearing in the court. You will need to read carefully all the information available on the court website before preparing your application.
Family law is an area which touches many individuals and families. Many of us know someone who has separated or may have difficulties navigating with their former spouse on property and children matters. Often, we hear of bits of advice on family law from friends and family members. Sometimes, the information is confusing and overwhelming.
In this article, we tackle some of the common misconceptions in family law so that there is clarity on these issues.
1. Misconception – We need to divide our finances 50/50 when we separate
A 50/50 split is not automatically the case! As lawyers, we often hear this when we first meet our clients. The law does not automatically say that a couple’s property and finances are to be divided equally. There are many factors that need to be considered such as financial and other contributions made by each party to the acquisition of the parties’ assets, the care of the household and the children, the length of the relationship, health issues or needs of each party, the future earning capacity of each party and the needs of children under the age of 18 years old. All these factors impact on the final overall percentage in the division of the parties’ assets.
2. Misconception – Children need to live in an equal shared, or 50/50 care arrangement
This is another misconception we hear all the time! A 50/50 care arrangement for the children is not automatic when parties separate. In children’s matters, the focus is not on the parents but on the best interests of the child. There are two matters to consider:-
Parental Responsibility
Whether both parents or only one parent should make decisions regarding major issues affecting their child such as schooling, health and religious upbringing; and
Live with and spend time
Whether the child is to live with one, or both parents and if so, the arrangements for this to occur and how much time the child is to spend with each parent.
When children are not returned to a parent after the Christmas holidays or on any other occasion, it usually results in frantic phone calls and text messages to the other parent to locate the children and to find out what is happening. Prolonged separation from one parent may be traumatic for the children. If you are a parent who has to face this situation, it brings on anxiety about the children’s well-being and fear that you may not see them again. If this occurs, what are your rights as a parent and what steps should you take?
In some cases, the children’s location is known, and the other parent simply refuses to return the children. In a more extreme situation, one parent has abducted the children or is in hiding with the children and the children’s whereabouts are unknown.
The first thing to do would be to immediately try and locate the whereabouts of your children and to contact your spouse to negotiate for their return. At the same time, try and negotiate with your spouse for a video or telephone call with the children. However, if there is risk to you or the child’s safety in approaching the parent or person who is holding the child, you should seek urgent legal advice before contacting the party who is keeping the child or children.
If you are separating from your spouse, you may experience significant financial impact. Instead of two parties sharing the same household costs, you and your spouse will now have to pay for separate accommodation and will have to fund separate households. Two households will mean more expenses for you.
Besides funds for the additional household costs, you may need the services of a lawyer to represent you to secure a fair share of the assets in the property division or to obtain court orders protecting your child’s interest in parenting disputes.
How can you then minimise your legal costs?
Be calm
Being calm and making rational decisions are easier said than done as it is only normal to be affected emotionally when a dispute arises with the person you have shared your life with. When dealing with separation, it is time to take a deep breath, attend counselling if required for support, and attempt to discuss the property split and children related matters in a calm manner with your former spouse. Rather than jumping straight into the family court, consider alternative dispute resolution as a means to resolve the dispute. This includes seeking the assistance of a mediator to act as an independent third party between you and your spouse. A skilled mediator can help parties focus on the issues at hand to reach a resolution. If you and your spouse can communicate and work through the issues impacting on the separation, you will be able to enter into consent court orders to record the terms of the property split and the parenting arrangements. This will save you loads of money in legal costs in having the dispute litigated in the family court. It is however important to seek legal advice before you enter into negotiations with your former spouse so that you understand your rights and entitlements under the family law.
Presumption of “Equal Shared Parental Responsibility” Removed: Child’s Best Interest is Paramount
The Family Law Amendment Bill 2023 is a significant change in family law, particularly in relation to child custody and parenting arrangements. If you have a child custody dispute, you will need to understand these changes as they may impact the outcome of your matter in court. It may also impact the terms you may wish to propose in negotiations with the other party on parenting arrangements.
These changes come about following an Australian Law Reform Commission report in 2019.
On 19 October 2023, the Australian federal parliament passed two pieces of legislation to amend the Family Law Act 1975 (‘FLA’). Some of the changes include:
Removing the presumption of “equal shared parental responsibility.” Previously, with this presumption in place, it meant that in negotiations and court hearings, the starting point was a presumption that each parent had an equal right to make major decisions about their children, such as schooling, medical, and religious issues. Following on with this presumption, under the previous legislation, the Family Court must then consider whether it is in the child’s best interests for the child to spend equal time or substantial and significant time with each parent. The Australian Law Reform Commission found that with this presumption in place, many parents misinterpreted it to mean that both parents should have an equal amount of time with the child. This presumption is now abolished. The starting point is no longer the parent’s right to equal parental responsibility. The focus is now clear: the one or only factor that prevails is the child’s best interest.
What factors the court is required to consider in determining the child’s best interests has been reduced from 15 factors under the previous legislation to 7 under the amendments legislated. The aim is to simply matter and put the focus on a child’s best interest. The seven factors include a child’s safety, their views, the benefit of having relationships with both parents, and the child’s developmental, psychological, emotional, and cultural needs.
If the Family Court makes an order for the parents to have joint decision-making responsibility on a matter affecting the child, for example, schooling or medical issues, a new provision has been legislated where the parties are now required to consult with each other and make a genuine effort to come to a joint decision on such matters (only if it is safe to do so). In cases where there is family violence, this may not apply.
The amendments also provide that when a child is spending time with one parent, that parent is not required to consult with the other parent on matters that are not major long-term issues.
There is a requirement for the Independent Children’s Lawyers (ICL) to meet with the child in certain circumstances.
Putting the principles of Rice v Asplund (1979) FLC 90 in legislation This case relates to when the Family Court can reopen a matter after final parenting orders have been made. Decided in 1979, this case stated that if any party wishes to vary or set aside a final parenting order, that party must show that there has been a “significant change in circumstances”. This principle is now captured by the amendments to the Family Law Act. Therefore, it is now legislated that to change a final parenting order, the party seeking the change must show that there has been a significant change in the circumstances relating to the child and that it would be in the best interest of the child for the final parenting order to be changed.
If you have any questions about your family law matter, please contact our principal family lawyer and Associate Director, Alexandra Naoum at enquiries@robertsonhayles.com or at our contact number, +61 (8) 9325 1700.
Note
The above content is only intended to provide a general overview of the topic discussed. It is not intended to be comprehensive, nor does it constitute legal advice. You should seek legal advice specific to your circumstances before acting on or relying on any of the above content.
In property settlement disputes between separating couples, a major concern is the complexity of court proceedings and the amount of legal costs they will be paying to work through the process in the Family Court. These concerns are intensified when there is only a small asset pool in dispute.
There is now some relief for separating couples with only a small asset pool for property division. The Family Court of Western Australia is instituting a new pathway from 1 October 2023 called “Priority Property Pool under $500,000” or “PPP500” in short, where there is now a quicker and more cost-effective pathway to resolve property settlement disputes for couples with a net asset pool under $500,000 (excluding superannuation). This is for both married and de facto couples going through a family law property settlement matter.
The aim of the PPP500 pathway is to achieve a just, efficient and timely resolution where the costs to the parties is reasonable and proportionate in the circumstances of their case.
Benefits of the PPP500 pathway
A case that falls under the “PPP500” pathway will have the following benefits: –
Simplified court documentation to be prepared and filed by the separating couple.
Simpler court procedures for the parties: –
To obtain procedural orders such as the exchange financial disclosure, valuation of assets and other procedural orders, within days of filing the court application.
To attend a Conciliation Conference before a Registrar of the Family Court where the Registrar will assist the parties to attempt a resolution of the dispute by agreement. (A Conciliation Conference is a form of a court led mediation which provides the parties with the opportunity to make a genuine effort to settle their dispute by agreement.)
To proceed to trial before a Magistrate of the Family Court where the Magistrate will determine the outcome of the dispute between the parties if no resolution by agreement can be reached. (A trial is the final hearing of the dispute before a judge where parties produce evidence of their case with the judge making a final determination of the matter.)
Shorter time frames for court procedures. For example, the first listing of the case will be held within approximately 6 weeks from the time the case is filed and a Conciliation Conference is to be held within 90 days thereafter. This means that there is a chance for parties to attend a Conciliation Conference and attempt a resolution by agreement within 6 months from the date where the matter is first filed in the Family Court.
Intensive monitoring of the parties’ compliance with orders and reminder correspondence from the court when orders have not been complied.
Some years ago, there was a news report of a married couple in Cambodia who, when separating after 40 years of marriage, agreed to divide their home and its contents by sawing the house in half. This must be the most literal interpretation of a property split.
The wife kept the half of the house that was standing, while the husband carried off the other half of the home and installed it in a nearby field.
The news report went on to state that the couple took the drastic action to saw their house in half as they felt that court proceedings to determine their property split would be too expensive.
The above story is a dramatic example, but it does capture the effect of a property split very well – upon separation, each party will walk away with a certain portion of the couple’s total asset pool.
How should married and de facto couples split their property on separation?
Under family law in Australia, there is no presumption of a 50-50 split of the couple’s total asset pool, even if parties have been married for a very long time. Instead, the Family Court will only make an order for a property split when satisfied that “in all the circumstances, it is just and equitable to make the order”.
The key is that the proportion and manner of the property split must be “just and equitable”. In simple terms, this means what is right and fair.
The Family Court has wide discretion to determine what is “just and equitable”. Generally, the court will go through a 4-step process to determine the proportion and the manner of the property split. This is applicable to both married and de facto couples. This process is only a guide, and the Family Court’s powers is not confined by any “step” or “stage” in exercising its discretion and reaching a decision that is just and equitable.
The four steps are as follows: –
Step 1
Identify and value all current assets and liabilities of the relationship. This includes: –
assets to which the parties, or either of them, are entitled. This would encompass assets held in one party’s name or in joint names or held jointly with third parties;
assets in Australia or overseas;
assets that were acquired by each party before the relationship started, during the relationship and after the relationship ended;
assets used by both parties or used solely by only one party;
assets for business or personal use;
assets held in any type of trust controlled by one or both of the parties.
Hence, all types and forms of assets must be identified and valued, including real estate, cash in the bank, stocks and shares, superannuation, business assets, cars, jewellery, companies, family trust interest and home contents.
Besides assets, all liabilities must also be identified and valued, including mortgages, personal loans, car financing, credit card debts and outstanding or expected tax liabilities.
If there is no agreement on the value, a valuation would be required.
Step 2
The next step is to consider what each person has contributed to the relationship: –
financial contributions made by each party to the relationship – this would include financial contributions for assets acquired before, during and after the relationship ended. This could be in the form of savings used to pay for the deposit for the home, earnings during the relationship to pay for the mortgage instalments and living expenses, each party’s inheritances and gifts received and other types of financial contributions.
non-financial contributions made by each party to the relationship such as the care of the children, household duties and the maintenance of the parties’ assets.
When considering the respective contributions of the parties, the court must consider all contributions holistically over the whole period from the commencement of the relationship to trial. There is no strict mathematical approach to determine each party’s contribution. This holistic approach to the assessment of contributions accommodates the wide range of factual scenarios to be dealt with by the Court.
Step 3
Consider the future needs of the parties, including:
the age and health of the parties
each party’s future income and financial resources (such as a family trust, or expected inheritance or compensation)
each parties’ capacity for employment
whether each party has care of a child
whether each party has responsibility for looking after other people
any other facts or circumstances which should be considered.
Step 4
The final step is to take a broad or helicopter view to make sure that the proportion and manner of the property split is “just and equitable” in all circumstances of the case.
When considering the property split, the Family Court has broad discretion to alter the interests of the parties. The Family Law Act provides that in property settlement proceedings, the court may make such order as it considers “appropriate”. This means that each case turns entirely on the view taken by the Family Court of the facts and merits of that case.
Property splitting upon the breakdown of a relationship can be a simple or complex process depending on the asset and liability pool and the factual scenario of each case. It is best that before parties embark on negotiations or make proposals to the other party that legal advice of your rights and entitlements is sought.
Contact us
For all enquiries, please get in touch with the family lawyers at Robertson Hayles Lawyers at (08) 9325 1700 or by email at enquiries@robertsonhayles.com or via our contact form, and we will be happy to assist you with your property settlement arising from your family law matter. We also assist with de facto property settlement.
Many parents with child dispute matter Google searches on the internet on “How to win child custody”. All parents want the best for their children and want to succeed in their child custody dispute. However, “winning” in child custody cases is about reaching an agreement or obtaining court orders where the child’s best interest wins.
First, let us clarify what “child custody” is all about. It is important to know that the common term used is ‘child custody’ but in legal terms, the word “custody” is no longer used. Parenting agreements and court orders talk about with whom the child “lives with” and “spends time with”.
Child custody relates primarily to two issues: –
Parental Responsibility Whether both parents or only one parent should make decisions regarding major issues affecting their child such as schooling, health and religious upbringing; and
Live with and spend time Whether the child is to live with one, or both parents on an alternate basis and how much time the child is to spend with each parent.
The “best interest” of the child is paramount
Child custody laws in Australia are governed by the Family Law Act 1975, which is a federal law that applies throughout Australia. It states in clear and unambiguous terms that, “in deciding whether to make a particular parenting order in relation to a child, a court must regard the best interests of the child as the paramount consideration.” This standard is often called the ‘paramountcy principle’.
In a previous case, the Family Court has said that “the paramountcy principle” means that the child’s interest is the focus and not the parents’ interest, preference or wishes. The wants, needs and well-being of the children override those of the parents.
A divorce is a court order that dissolves a marriage.
What is the divorce process in Western Australia?
Divorce only applies to a married couple. Divorce occurs when all legal requirements to end a marriage are completed. It starts with the married couple separating for 12 months and then filing a divorce application with the Family Court of Western Australia. The Family Court then hears the divorce application, and the marriage is legally ended when the Family Court makes a Divorce Order.
If you are in a de facto relationship, there is no requirement to undergo a divorce in court. In a de facto relationship, the relationship ends when you separate and inform your partner of the separation.
A divorce application can be filed as a joint or sole divorce application. If you have children under the age of 18 years, a court hearing may be required at the Family Court of Western Australia so the court is satisfied with the parenting and custody arrangements of the children. Otherwise, if a court hearing is unnecessary, the divorce application is heard without the parties.
Grandparents play an essential role in caring for children, particularly after separation.
Do grandparents have the right to see their grandchildren in Perth?
The simple answer is Yes!
Generally, the Family Court of Western Australia will consider that grandparents have a right to have a relationship with their grandchildren after the parents separate. The family court in Perth will make orders for families and children that live in the Perth metropolitan area and regional Western Australia.
What custody rights do grandparents have?
Grandparents have a right to be involved in their grandchildren’s lives, which includes spending time with them, having video calls or telephone communication and watching them at school events, assemblies and extra-curricular activities.
The Family Court also believes that grandparents can step in to care for their grandchild or grandchildren and have custody. Sometimes, a child welfare authority, like the Police or the Department of Child Protection, can make recommendations for a grandparent to care for a child when their parents separate or when there is a significant risk issue affecting the parent’s ability to care for a child, such as drug use or family violence.
A grandparent can apply for child custody in the Family Court of Western Australia. They can also ask the Court to make orders to enrol the child in school, seek medical treatment, or travel within or outside Australia with the child. The Family Court of Western Australia also hears court applications made by grandparents for a recovery order and relocation application.
In Australia, there are no inheritance taxes payable. There are no capital gains tax payable on a transfer of assets from the deceased to the estate and finally to the beneficiaries. However, as the Australian Taxation Office points out on its website, “There may be some tax obligations for beneficiaries, depending on the nature of any distribution they may receive.”
Receiving Assets from the Estate
Beneficiaries often receive money held by the deceased in a bank account. A beneficiary does not pay any tax on such money received. The deceased or the estate in the final tax return will pay tax on the taxable amount of the interest earned in relation to these monies.
Beneficiaries who receive real estate, or a share of the real estate from the estate are not taxed at the time when the title is transferred to them. Instead, they inherit the “cost base” namely the costs incurred by the deceased at the time when the real estate was acquired by the deceased so that when the real estate is disposed by the beneficiary, capital gains tax can be calculated to determine if any gain is made. Capital gains tax is payable by the beneficiary on any gain made.
This position is similar to company shares held by the deceased. Company shares transferred to the beneficiary are received tax free. Capital gains tax is payable when the shares are disposed of by the beneficiary and income tax is payable on income derived from the shares as dividends.
Receiving Money from Sale of Assets by the Estate
If the assets of the estate such as real estate or company shares are sold by the executor or administrator of the estate, they are required to pay any tax payable by the estate. The executor or administrator applies to the Australian Taxation Office for a tax file number and files an estate tax return. For a period of two years, the estate receives the benefit of paying tax at the progressive tax rate, same as an adult taxpayer. After that, the estate is taxed as a trust at the maximum tax rate if paid by the trustee, or if allocated to beneficiaries who are presently entitled then tax is paid by the beneficiary at their personal marginal rate of tax.
We offer a fixed-fee initial consultation so you can book in to discuss your matter without the worry of committing to a legal retainer. To book in for your initial appointment, please complete the appointment form or call (08) 9325 1700.
The news report went on to state that the couple took the drastic action to saw their house in half as they felt that court proceedings to determine their property split would be too expensive.
