It never ceases to amaze me how many of our clients have consulted other experts – be it financial advisors, accountants or commercial lawyers – with the clients expecting these experts to understand how family law intersects with wealth protection.
Financial Advisors may be working with a couple in relation to wealth creation, but it is not their area of expertise to advise on how best to secure assets against relationship breakdown. Accountants might be working on tax minimisation or income splitting which may also include creation of a trust and allowing for trust income distributions. Commercial lawyers may have been focused on establishing the tax effective vehicles to enable the financial benefits to flow to their clients and may have also taken into account legal protection from third parties attacking assets in a given vehicle.
Rarely do any of these allied professionals consider the adverse impact of separation and divorce on the personal and business wealth of a couple. If they have considered it, they may well have biased their advice or thinking in favour of the more financial half of the couple. Even if they have considered it, when drafting the suite of documents designed to protect their client from separation, did they ensure that their client actually got the help and advice they needed?
Time and again Caroline Counsel Family Lawyers sees an attempt by allied professionals to encourage a client to seek family law advice about how best to protect assets from separation and divorce. They then focus on creating the structure their expertise is centred on such creating a suite of documents to establish a family trust with corporate trustee or mutual Wills and powers of attorney. They ensure that their work is in keeping with legislative requirements and are drafted to produce the right result for their client. Then they forget to ensure that the client got the help they need to have the difficult conversation with their spouse or de facto partner about wealth protection as between them as a couple. The client usually has no appetite to go home and have the difficult conversation either. And there the exploration ends. At least until we become involved as family lawyers in assisting clients resolve their family law dispute.
Without a Financial Agreement which has been entered into strictly in accordance with the provisions of the Family Law Act and current case law, the full force and effect of the Family Law Act is available to separating couples when petitioning the court to make adjustments between them in relation to legal and equitable interests in property. “Property” in this instance has a very broad definition. It is not restricted to real estate. Legal ownership does not afford legal protection so being the registered proprietor of real property does not assist. Nor does putting assets into trusts or divesting yourself of assets ahead of separation.
When assessing property and maintenance claims, the Court takes into account all of the income, financial resources and assets of the respective parties and this is regardless of whose name an asset is in or when the asset has been acquired. Anyone wishing to ensure that the hard work of their other professional advisors is not in vain, must consult an expert in Family Law and preferably one who knows how to work in concert with your advisors.
If you have been advised to have a financial structure for either wealth creation or asset protection, you need to ensure that you actually get the protection you thought you signed up for. You need to consult with an expert in Family Law. Caroline Counsel Family Lawyers has such expertise and can assist you with advice and in providing you the documents you need.
If you would like advice specific to your situation, please contact our office to make an appointment on 9320 3900 or email [email protected].
The information in this blog does not constitute legal advice and cannot be relied upon by you. If you require advice specific to your situation you must contact Caroline Counsel Family Lawyers for legal advice. The contents of this blog are relevant as at 6 July 2018. We recommend you obtain specific advice relevant to you and your family’s situation.
By Caroline Counsel