Unpacking the Family Court Structural Reforms

Unpacking the Family Court Structural Reforms

The government has introduced the Federal Circuit and Family Court of Australia Bill 2019 in order to structurally reform the Federal Circuit Court and Family Court of Australia, both of which currently have responsibility for family law matters. This merger has been proposed to help reduce delays and increasing backlogs in the family law courts leading to greater efficiency in the way family law matters are dealt with in Australia. This hotly debated reform passed the lower house late last year (December 2020) despite much opposition. In this blog, we review the proposed court merger and other changes under this bill.

The Court Merger

The Federal Circuit and Family Court of Australia Bill 2019 aims to bring the Federal Circuit Court of Australia and the Family Court of Australia together into an overarching, unified administrative structure to be known as the Federal Circuit and Family Court of Australia (FCFC). These structural reforms facilitated by the Bill purport to create a framework in the Federal Circuit and Family Court of Australia for common leadership, common management and a comprehensive and consistent internal case management approach.

There is a clear emphasis on efficiency, evident under section 5 of the Bill which states that the object of this legislative instrument is:

(a)  to ensure that justice is delivered by federal courts effectively and efficiently; and

(b)  to provide for just outcomes, in particular, in family law or child support proceedings; and

(c)  to provide a framework to facilitate cooperation between the Federal Circuit and Family Court of Australia (Division 1) and the Federal Circuit and Family Court of Australia (Division 2) with the aim of ensuring:

(i)  common rules of court and forms; and

(ii)  common practices and procedures; and

(iii)  common approaches to case management.

In a Media Release from the office of the Attorney-General, Christian Porter has said that ‘bringing the courts together under one amalgamated structure creates a single point of entry for families who will no longer be bounced around between different courts – an issue that occurs too often in the current system and can lead to lengthy delays for families because matters have to begin again.’ However, it is worth noting that some legal experts, while acknowledging the difficulties presented by a duplicate court system, worry that the merger will be an abolition of the specialist Family Court of Australia.

Other Changes

The legislation also requires that judges hearing family law matters in either Division will need to satisfy additional appointment criteria to guarantee they are suitable to dealing with family law matters, including family violence. This is due to the fact that many matters that come before the family court tend to have elements of family violence, therefore family law judges will also need to have a strong understanding of family violence and its implications for the safety of women and children.

In a further Media Release from the office of the Attorney-General, it was noted that the Government has provided $4 million in funding to the federal courts to review court rules and assist with implementing the reforms as well as a $3.7 million boost to court resources.

Get Legal Advice

Navigating the family law system can be a confusing and emotionally exhausting task. Our dedicated family law solicitors are ready and willing to assist you with your parenting or family law concerns. If you would like further information, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or via our contact form. For more articles on family and other areas of law, see our blog here.

Understanding Family Law Financial Settlement Documents

Understanding Family Law Financial Settlement Documents

When ex-partners come to an understanding in terms of settling financial matters upon separation, there are two key ways to finalise this agreement in a legally binding way. These are ‘consent orders’ and a ‘financial agreement’. Not many people are aware that it is important to finalise family law financial matters in a legally binding way, as informal agreements can easily collapse and a court application can come at any time and many years following the breakdown of the relationship. In this blog, we review the two most common ways of finalising family law financial agreements and considerations you should take into account when deciding which avenue is most appropriate for you.

Consent orders

A consent order is a written agreement that is approved by a court. It can cover many family law matters, such as parenting arrangements for children as well as financial arrangements such as property and maintenance. Consent orders are lodged with the Family Court and officially stamped as a court order. The Court must be satisfied that the consent orders are just and equitable and/or in the best interests of the child/children (if applicable) before they make a consent order.

In order to obtain the stamped court order, two documents are required to be filed. These are the Application for Consent Orders and the proposed orders. The Application will contain important details of the parties, such as assets, liabilities, income and super. The proposed orders should set out the orders that the parties have agreed on and are asking the Court to make.

Financial agreements

A financial agreement is not lodged with a court and is rather a private contract agreed on between the parties. In order to ensure the agreement is legally binding and enforceable, both parties are required to receive independent legal advice from different legal professionals about the consequences of signing the agreement.

Considerations when deciding which agreement is best for you

When deciding which avenue is more appropriate for your circumstances, there are a variety of considerations to take into account. Some of these include:

  • Consent orders can cover matters pertaining to spousal maintenance, however a financial agreement may be a safer option to guard against any applications to prolong or increase maintenance. It is important to keep in mind that you are not confined to either option to settle your financial arrangements and a hybrid model could allow you to finalise your property settlement while a financial agreement could settle your spousal maintenance.
  • A financial agreement is not subject to judicial scrutiny and is a private agreement. However, for a court to approve consent orders, it must agree that the orders are just and equitable. For financial agreements, any deal can be struck no matter how unfair it may be perceived.
  • Often consent orders can take a long period of time to be approved, however financial agreements come into effect essentially upon the signing of the agreement by each party.
  • If you are seeking property orders, you should read and consider sections 75 factors outlined in the Family Law Act 1975. To learn more about section 75 factors, see our blog here. Some of these factors include:
    • How the length of the marriage affected the earning capacity of the party seeking maintenance
    • The age of any children of the marriage/relationship
    • The age and state of health of each of the parties
    • The income, property, finances and ability to earn an income of each party

Get Legal Advice

An experienced family law professional will be able to assist you with determining which family law settlement document is most appropriate for you and your circumstances. If you would like further information, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or via our contact form. For more articles on family and other areas of law, see our blog here.

Inheritances and Family Law

Inheritances and Family Law

Families and money can sometimes be a volatile combination. This can be complicated especially in circumstances where a divorce or separation occurs and a new Will isn’t drafted to reflect the change of circumstances. In this blog, we review what it means to have an inheritance included in the asset pool of a separating couple.

Why is inheritance an asset?

When a separating couple needs to divide their assets, they must first work out the pool of net assets available for distribution. The pool includes all the assets and liabilities in each person’s name and in the parties’ joint names, as well as each person’s share of an asset owned jointly with another person.

If one person received an inheritance before or during the relationship, that inheritance would normally form part of the pool of assets available for distribution.

Does that mean my partner gets half my inheritance?

No, not necessarily. Just because an asset is included in the pool of assets available for distribution does not mean that the asset or the whole pool will be divided 50/50. Each matter is considered on a case-by-case basis.

Importantly, once the parties have identified what is in the pool of net assets, they must then consider what contributions they each made, and their respective future needs, in order to determine their respective entitlements and percentage split of the net assets they will each receive.

What are contributions?

When working out which party made what contribution, the Family Court considers the parties’ financial contributions – i.e., who earned what, the lump sums expended during the relationship, who bought what and who paid for what – and also non-financial contributions – such as being a homemaker and parent, physically renovating a home or landscaping a garden, managing the parties’ financial affairs, etc.

After a long relationship where there haven’t been any significant inheritances or other financial windfalls, a court usually finds that financial and non-financial contributions during the relationship are roughly equal, unless special circumstances apply.

An inheritance received by one party before the commencement of the relationship would be treated as an initial financial contribution by that person – i.e., money or assets that person brought into the relationship. Similarly, an inheritance received by one partner during the relationship is usually considered to be a financial contribution by that person.

In these circumstances, depending on factors such as the size of the inheritance, when it was received, what it was used for and the parties’ other contributions, this would generally mean that the person who received the inheritance would be treated as having made greater contributions during the relationship.

What about an inheritance received after separation?

This situation is less clear cut. A court usually considers an inheritance by one party as a sole contribution by that person. Generally, this will usually mean that the other party did not contribute to the post-separation inheritance and it should not be included in the pool of assets to be divided. However, each matter is dealt with on a case-by-case basis and while this may be a potential result, it is always dependent on the facts of the case and the circumstances of the lead up to the inheritance.

For example, if the post-separation inheritance had been received from the husband’s mother and the wife had a close relationship with her mother-in-law and had cared for her during an illness, a court might find that both parties had contributed to the receipt of the inheritance and therefore both parties will be entitled to a share of the inheritance.

Future needs

After working out financial and non-financial contributions, the future needs of the parties are assessed  before determining a split of the net assets and whether any adjustments should be made in favour of the party in need. Future needs include things like income, earning capacity, financial resources, ongoing care of children, age, health, etc.

An inheritance, even one received after separation, may be taken into account in this final step. The reason for this is the recipient of the inheritance would have greater financial resources and may be receiving income from an inherited investment which may well mean that person’s future financial circumstances may significantly outweigh the other person.  In such a case, a court may rebalance the division of the net asset pool in favour of the other partner by way of an adjustment which is derived from section 75(2) of the Family Law Act (Cth).

Summary

An inheritance received before or during a relationship will almost always be treated as an asset available for distribution between separating parties, whereas an inheritance received after separation will usually be found not to fall into the main pool of assets but may be treated in a separate pool. However, that does not necessarily mean that the other person is entitled to half the inheritance.

The receipt of a large inheritance will almost always have a significant impact towards the determination of contribution of the parties. In addition, an inheritance, including one received after separation, could have an impact on the determination of future needs of the parties and whether any adjustments ought to be made.

Finally, once the parties have been assessed as to the net assets, what contributions were made, whether there are future needs, a court is then required to determine whether the proposed split of net assets is just and equitable.

Contact us

The Family Law team at Etheringtons Solicitors are skilled at handling all matters relating to inheritances and are able to assist with complex cases in the event of a relationship breakdown. If you need assistance with any area of Family Law, do not hesitate to contact us on 9963 9800 or via our contact form here.

Family Law and Going to Court

Family Law and Going to Court

When a relationship or marriage ends, people often have a fear that they will need to go to court to deal with the separation of joint assets and liabilities, and arrangements for their children. The fear of going to court, on top of the emotional side of separation, can be extremely stressful for those involved.

Do I need to go to Court?

It is not always the case that people automatically need to go to court when their marriage or de facto relationship ends. If the parties to a separation can agree on how they separate jointly-owned assets and liabilities and also have an agreed co-parenting arrangement for  the children there is no need to go to court at all.

Do I need a Lawyer?

You will most likely need a legal document to be drafted to ensure that the agreement between the separated persons is clear, defined and legally binding. This is when a family law solicitor can assist you. Your family law solicitor will be able to explain to you the different types of documents that are available to set out the separation of assets and liabilities. You can also obtain such documentation to set out the children’s arrangements. The Family Law Act 1975 (Cth) sets out how these different agreements function.

There are different types of documents available to you, and your solicitor can also tell you what will work best for your situation. Once you have decided on the type of document you need, your solicitor will be able to draft the document to reflect what you and your ex-spouse have agreed, to ensure that it is clear and binding.

Why Should I get Legal Representation?

Each party will need their own legal representation before signing any documentation to ensure that they obtain independent advice.

Clients often find that once they have entered into binding documents drafted by their lawyer, there are fewer arguments between them and they can move on with their lives with certainty following their separation or divorce.

Contact us

The team at Etheringtons Solicitors are skilled at handling all matters relating to Family Law, and are able to assist with complex cases. If you need assistance with any area of Family Law, do not hesitate to contact us on 9963 9800, via email to law@etheringtons.com.au or enter your details in the form here and we will contact you.

Is Money From Family a Gift or a Loan When Separating?

Is Money From Family a Gift or a Loan When Separating?

It is becoming increasingly common that couples receive financial assistance from their parents. This can be through transfer of property, the giving of money or both. This assistance is becoming progressively prevalent due to rising prices within the property market which has meant that many couples are unable to enter the market without assistance from their parents. However, this can cause issues if the couple separates, as there can be a dispute as to whether the money provided was provided by way of a gift or a loan.

In a property settlement, the family law court can treat payments made by a parent to their child in two ways:

  • The court may find that the payment was a gift to the child which is not expected to be repaid.
  • The court may find that the payment is a loan from the parents that is to be repayable in full.

How does the family law court treat gifts?

In general, a court treats gifts from a parent as being for the benefit of their child alone. Because of this, when assessing entitlements, the court will apply such gifts  towards that spouse’s side of the ledger, when determining their entitlement. This would result in that spouse receiving an extra contribution as a result of the gift applied towards the relationship. However, if the intention was that the gift was to be provided to both parties to the relationship then it would be open for a spouse to contend that the gift is to be taken as an equal contribution of both parties.

How does the family law court treat loans?

If the money is determined to be a loan from the parents, the court must then determine whether the loan is legally repayable and in doing so, they must consider whether the loan is likely to be repaid in the foreseeable future. If the loan is unsecured, the court has discretion to either deduct the loan from the pool of assets or not. If the terms of the loan are vague or uncertain, the court is less likely to enforce the loan. Evidence about the loan determines how the loan is treated. If there is any oral or written evidence of the loan, and the parties have complied with the terms of the loan through actions such as making repayments, the court may be likely to uphold the existence of a loan. However, if there is little or no evidence that supports the claim that it was a loan, and there were no repayments made, the court would be less likely to uphold the existence of the loan.

Parents considering lending money to children who are married or are in a de facto relationship

If you are considering lending money to your child who is married or in a de facto relationship, it is important that there is documentation which adequately establishes that the money provided is to be treated as a loan.

The documentation can include:

  • A loan agreement that sets out the terms of the loan which is signed by all the parties involved
  • A mortgage over the property that secures the loan

Further to the documentation, it is important that the parties to the loan comply with its terms and obtain any appropriate legal advice. If, under the loan, repayments are to be made, they must be made or if payment of the loan is reliant on an event or after a particular time period which has passed, then a new loan agreement should be entered into.

Contact Us

If you have separated from your partner and your parents have lent you money and you are not sure whether it will be treated as a gift or a loan in court or you are wishing to lend money to your child who is in a relationship and you would like more information on how we can assist you in your matter contact us on 9963 9800 or by email to law@etheringtons.com.au.

Making a Child Support Agreement

Making a Child Support Agreement

Child support agreements are contractual arrangements between parents or non-parent carers to enable financial support for their children. The Child Support Scheme was introduced by the Australian government in 1998 to ensure the adequacy of court ordered child maintenance. Child Support is payable for all children living in Australia (up to the age of 18 years) following separation, regardless of whether the couple were married to each other or not.

Child Support Assessment

The Department of Human Services can make an assessment for child support based on income tax records and other financial information held by the ATO and the Commonwealth Government. The assessment is a complex formula and will broadly take into account the following:

  • Parents’ income
  • Combined income
  • Time each parent cares for the child
  • Child’s age
  • Living expenses

Child Support Agreements

If parties are able to reach an agreement between the other, then a solicitor can prepare a binding Child Support Agreement which is registered with the Department of Human Services. The agreement may include a combination of cash payments and non-cash payments (such as health insurance and school fees). There are two types of Child Support Agreements that can be formed depending on your circumstances.

1. Limited Child Support Agreement

This agreement requires a Child Support Assessment to be undertaken before the Child Support Agency accept the terms of the Agreement. A Limited Child Support Agreement is limited by the amount payable under the agreement, which must be equal to or more than the Child Support Assessment.

2. Binding Child Support Agreement

A Binding Child Support Agreement can be entered into between the parties despite whether a child support assessment was undertaken or not.  Further, it can be made for any amount that is mutually agreed upon. However, both parties must obtain independent legal advice before making or terminating a Binding Child Support Agreement.

Court Ordered Child Support

A court may make a child maintenance order for children not covered by child support legislation, such as maintenance for children from carers who are not eligible for a child support assessment. The Family Law Act regulates the process of enforcing child maintenance orders.

Contact us

The team at Etheringtons Solicitors are skilled at handling all matters relating to Child Support Agreements, and are able to assist with complex cases and the modifying of agreements after they are in place. If you are currently thinking about entering a Child Support Agreement or need assistance with any area of Family Law, do not hesitate to contact us on 9963 9800 or via our contact form here.