Jul 14, 2020 | Family Law
Did you know that once you enter into a marriage or de facto relationship, in certain circumstances, you or your spouse could be liable to maintain the other in the event the relationship breaks down? This is known as spousal maintenance.
This responsibility to financially assist an ex-partner is set out in the Family Law Act and exists if one party cannot meet their own reasonable expenses from their personal income or assets.
Where this need exists both parties have an equal duty to support and maintain each other as far as they can, with this obligation continuing sometimes even after separation and divorce. This article explains this key area of Family Law in detail.
Spousal Maintenance is different to Child Support
Firstly, it is important to know that spousal maintenance is not child support.
Child support is paid for the benefit of children, and aims to ensure the guardians of children have the financial means necessary to support those children. In addition to child support, the court may order a party to pay spousal maintenance.
What exactly is Spousal Maintenance?
The Family Court can only make an order for one party to pay spousal maintenance to the other if the partner making the application is unable to adequately meet his or her own reasonable needs and the other partner has the capacity to pay.
Maintenance for a former spouse or de facto partner is the division of future income and/or current capital assets following the breakdown of a relationship. In certain circumstances, separating couples can have an obligation to provide ongoing financial payments in the form of weekly or lump sum payments by way of maintenance for their partner.
This liability to maintain a former spouse or de facto partner can continue until their death or until they have the financial capacity to support themselves. Usually the payment of spousal maintenance is tailored to end upon the occurrence of a specific event, for example, the person completing training or re-skilling, securing employment, or commencing a new de facto relationship or marriage.
Time Limits
Applications for spousal maintenance for married couples must be made within 12 months of their divorce becoming final. Applications for de facto partner maintenance must be made within 2 years of the breakdown of the de facto relationship.
It is possible to apply outside the time limits, but the court does not always grant these late applications.
What if the person is in a new relationship?
A former spouse is not entitled to spousal maintenance if they marry another person. If they start a new de facto relationship the court will have regard to the financial relationship between that person and their new de facto partner when considering whether the former partner can adequately support themselves.
What does a Court consider when making a Spousal Maintenance Order?
Spousal maintenance is not an automatic right. In deciding a maintenance application, a court considers the needs of an applicant and the respondent’s capacity to pay, including the parties’:
- Age and health;
- Income, property, and financial resources;
- Ability to work;
- Ability to earn an income as a result of the marriage;
- Suitable standard of living.
An example of when a court will most likely make an order for spousal maintenance is in cases where one party is at home caring for young children and therefore is unable to work and earn income.
Other examples could be where one party has been out of the workforce for a significant period of time raising children and has become de-skilled or unemployable due to age, being unemployed for an extended period of time, or illness.
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A party’s obligation to pay spousal maintenance may be discharged in various ways including through periodic and regular payments or by way of a lump sum payment. It may also exist for different periods of time.
Although spousal maintenance is generally intended to operate only for a short period of time following separation to enable applicants to get back on their feet, in certain circumstances, it may be appropriate that spousal maintenance be paid for a longer period of time.
The calculation of and assessment for the need of spousal maintenance requires a deep understanding of family law and time limits apply.
If you know someone who needs help and would like to have a confidential discussion please arrange for them to call Etheringtons Solicitors on (02) 9963 9800 or via the contact form here.
Jul 7, 2020 | Family Law
It is important during a breakdown of a relationship or marriage both parties consider the issue of separating assets and liabilities. It goes without saying that separation is often a time that is highly emotional and stressful, however it is almost always a significant life changer as it may leave the vulnerable with significant financial strain.
Property Settlement
Often long term de-facto relationships and marriages involve jointly owned assets, including properties, home contents and motor vehicles that have been accrued during the relationship or contributed by one party.
It is common for most couples to be able to agree on how shared assets should be divided (known as a “property settlement”), and arrangements may involve the jointly owned property being sold and the proceeds divided, or the joint property being transferred into one of the parties’ sole names. Whichever it may be, it is advisable to formalise the property settlement agreement in a legal document. The main reasons for doing this are to:
- Ensure that the agreement is clear and concise and legally binding.
- Achieve a sense of closure.
- Ensure that neither party can make a claim on the other in the future and thus obtain certainty.
- Achieve an exemption from stamp duty when transferring a piece of property to the other party.
In some cases, couples are unable to agree on how assets and liabilities should be divided. When this occurs, it is best to seek legal advice from a solicitor to be informed of your rights and to allow for negotiations to occur with your former spouse. Unfortunately, where agreements simply cannot be reached through negotiations or alternative dispute resolution, the only available avenue is to proceed to court.
Why seek legal representation?
People who have gone through a separation are often more satisfied with the outcome in the circumstances where they can mutually agree on it, whether that be through negotiation or between themselves with minimal legal intervention, as opposed to a court judgment.
We know that a mutually beneficial and cost-effective resolution is the most desirable in the circumstances. If you would like more information on how we can assist you with your property settlement matter or any other family law matters, do not hesitate to contact us on 9963 9800 or via the contact page form here.
Jun 28, 2020 | Family Law
Collaborative law is a new approach used to resolve legal disputes, particularly in relation to Family Law. Collaborative law has many benefits of cooperation, mutual outcomes and sustained relationships in comparison to traditional approaches of litigation. Collaborative lawyers are qualified lawyers with training and experience in dispute resolution and facilitation processes. This article will outline the collaborative law approach in family law matters, the benefits of using this new approach, and some cases in which collaborative law may not work for parties.
The Collaborative Law Approach
Collaborative law is where the parties to a dispute and their lawyers sign a Participation Agreement in which they agree to conduct confidential and transparent negotiations to resolve their matter without turning to litigation. Generally, the parties will meet several times to work towards a settlement that meets the beneficial interests of both parties.
The parties must agree not to threaten litigation and the lawyers must not advise the parties to start court proceedings. If an application is made to commence proceedings in a court or tribunal the agreement is terminated and both lawyers must discontinue representing their clients.
Approach Summarised
- The professionals involved in a collaborative law arrangement are bound by professional conduct rules and client confidentiality.
- Parties must act in good faith, provide full disclosure and attempt to reach a resolution.
- Apart from financial disclosure, discussion and documentation will be subject to legal privilege which means they cannot be used in court proceedings. Only where a professional has a statutory obligation to make a report (for example where a child is at risk) will confidentiality and privilege be overridden.
- Negotiations are conducted directly between the parties and their lawyers – opinions and ideas are expressed face to face rather than using the lawyer as an intermediary for communication.
- Correspondence between the parties’ lawyers is limited – being replaced by minutes documenting the discussions and decisions made during the meetings.
- Once a settlement is negotiated, the agreement will be legally documented for the parties to approve and sign.
- Litigation must not be threatened nor commenced otherwise the agreement will be terminated and the parties will need to find alternate representation. This is a considerable incentive to keep parties focused on the issues in dispute and working towards a resolution.
Collaborative Law in Family Matters
Collaborative law can be used for a range of legal matters including disputes between businesses, neighbours and in family law.
The process is particularly suited to family law matters as the conciliatory approach has potential to preserve or protect the relationship between the parties. Clearly, this is beneficial where children are involved, given that the parents will need to have ongoing contact and discussions regarding the welfare and care of their children.
An overriding benefit of the Participation Agreement is that the parties are making a commitment to resolve the dispute without litigation. This enables the parties to ‘steer’ towards a mutually beneficial resolution and choose their time frame rather than have directions and hearing dates set by a court or tribunal. This has the potential to significantly minimise cost and delay, and of course, the stress and anxiety of being involved in court proceedings.
Clients and their lawyers set the agenda for each meeting and the lawyers liaise with each other regarding the agreed procedural aspects for running the meetings.
Benefits of using the Collaborative Law Approach
By giving the parties collective control over how their matter progresses, settlements may be reached which are less restrictive than what might be ordered by a court. Parties are not confined to technical legal issues and can therefore agree on more flexible resolutions that include non-legal matters.
Since collaborative law is non-adversarial, there is no winner or loser. This allows the parties to maintain dignity and respect for each other. Although each party must give full disclosure of facts relating to the issues in dispute, the discussions and meetings are family-focused with a facilitative approach. The parties must involve themselves in a concerted team effort to settle the dispute.
If necessary, the parties can agree to involve an impartial coach or facilitator to assist in reducing conflict or a professional (accountant, valuer, child specialist) to provide an expert opinion.
When might collaborative law not work?
Whilst collaborative law is open to all family matters, it may not be suitable if one or both parties are antagonistic, violent, have a drug or alcohol dependency or have severe psychological disorders. Safety issues and significant trust concerns will also be a barrier to effective negotiations.
The parties must be fully committed and not see the collaborative approach as a way around disclosure obligations.
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Collaborative law may not be appropriate for every legal dispute but is certainly worth considering as an alternative way to resolve your family law issues.
Lawyers engaging in the collaborative law process should be suitably trained and committed. If the Participation Agreement is terminated both lawyers may no longer act for the parties who will need to find alternate representation.
If you or someone you know wants more information or needs help or advice, please contact Etheringtons Solicitors on (02) 9963 9800 or contact us here.
Jun 19, 2020 | Property Law
One of the fundamental issues which require addressing during the process of a breakdown of marriage or de-facto relationship is the subject of a ‘property settlement’. A property settlement is an arrangement which is made between the separating parties when dividing assets, liabilities and financial resources (such as a trust, bank deposits or future inheritance). There is no presumption in family law whereby each party receives an equal division of assets in a property settlement.
Each case is unique and varies depending on a set of circumstances which are set out in in the Family Law Act 1975. For this reason, property settlements should be approached in a bespoke manner to ensure a just and equitable result in achieve for the parties. In assessing this criteria, there are five steps that the courts consider when parties are contemplating a property settlement at the end of a marriage or de-facto relationship. This article will explain these 5 important steps.
The Five (5) Step Approach:
Step 1: Identify the assets available for division
The first step is to determine the net asset pool of the relationship. This will involve identifying whether the current assets and liabilities of each party are held jointly with the former partner or separately.
It is prudent that parties provide full and frank disclosure of their personal property, including real estate, vehicles, furniture, shares and bank accounts, as required by the legislative principles. It is also important that parties account for other financial resources such as whether they are beneficiaries under a trust or a Will. Whether a property forms part of the main asset pool to be divided will depend on the degree of control and interest exercised by each party.
Similarly, joint liabilities must also be taken into account, including mortgages, personal loans and credit card balances.
Step 2: Contemplate whether it is ‘just and equitable’ to make an adjustment
The Court must then consider whether it is ‘just and equitable’ to intervene and make any adjustment to the property division before assessing individual contributions by the parties.
Step 3: Consider the contribution of each party to the relationship
Both financial and non-financial contributions made by each party will be assessed by the Court. This includes contributions from the time of commencement of co-habituation through to after separation. The main categories of contributions are recognised as follows:
- Financial
Monetary contributions made during the relationship, including:
- Income and wages;
- Property acquired during the relationship;
- Assets owned at the commencement of co-habitation;
- Gifts and prize winnings;
- In some cases, inheritances.
- Parent/Carer and Homemaker
Contributions to the welfare of the family are significant and can be seen as equal compared to a party working full-time. Some examples include:
- Caring for children;
- Caring for elderly;
- Homemaking;
- Housework;
- Cleaning;
- General parenting responsibilities;
- Grocery shopping and cooking;
- Non-financial
This category recognises that non-financial value can be contributed to the relationship.
- Renovations or landscaping work done to the family home or an investment property;
- Unpaid work in a family business;
- Contributing to start up a business.
Step 4: Identify the future needs of each party
After assessing the contributions of each party, the Court must have regard to the current and future needs of each party to the relationship. The factors which the Court considers are detailed in Section 75(2) of the Family Law Act which include:
- Age and state of health;
- Income and future earning capacity;
- Property and financial resources;
- Parental responsibility of children;
- Caretaking responsibilities;
- Duration of the relationship or marriage.
Step 5: Review whether the final proposed division is ‘just and equitable’
In the final step, the Court will consider whether the proposed percentage distribution and allocation of assets and liabilities is fair. In this step, the Court may consider making an adjustment under section 75(2) of the Family Law Act which may vary the end result.
Seek Legal Advice
Property settlement and family law proceedings can often be complex. If you would like further information regarding property settlements or if you have any general family law enquiries, please do not hesitate to contact one of our experienced solicitors on 9963 9800 for a confidential discussion or via our contact form.
