There are many advantages of obtaining independent legal advice from a family lawyer. Most importantly, you will find out whether an agreement reached between you and your former partner is appropriate, based on your individual circumstances. There are also many practical benefits to obtaining legal advice following separation which you should take into account, including:
1. Sever your personal AND financial ties
By formalising a property settlement with your former partner, the legal effect is that it severs your financial ties with each other. This means that you are financially independent of the other, such that you cannot be potentially liable for any debts in your former partner’s name, or if you were to receive a gift or inheritance, your former partner is no longer able to make a claim upon, or seek a distribution from those funds.
2. Do it now, while you still can!
There are limitation periods that apply to separated couples, in terms of how much time you have to formalise a property settlement following separation or divorce. If you miss out on those deadlines, you can still apply to the Court to seek property settlement orders “out of time”, but this can be a difficult and expensive exercise, and there is no guarantee that the Court will allow this.
Further, the longer that you delay the formalisation of your property settlement, the more difficult it becomes to establish your entitlement. For example, there may be a change in circumstances since the time you separate which puts you at a disadvantage, or you or your former partner may have entered into new relationships, which may mean that other people have a claim upon “matrimonial assets”.
3. Stamp Duty Exemption
Entering into Consent Orders or a Binding Financial Agreement will attract a stamp duty exemption if you and your former partner are transferring property. If you are considering retaining your former matrimonial home or perhaps your investment property, you will not be liable to pay stamp duty on that transfer. The same also applies for motor vehicles, where the terms of Consent Orders or a Binding Financial Agreement provide for that to be transferred.
4. Get advice about tax and financial consequences
It’s important that you turn your mind to the taxation consequences about any agreement reached between you and your former partner. This may be relevant to the outcome of your property settlement, for example, if you are retaining a rental property which may carry a Capital Gains Tax liability.
Your family lawyer can refer you to a number of other professionals who can give you financial advice, including about possible tax consequences. It is advisable to see a financial planner who can also advise you about the outcome of any settlement reached – or to advise you about what combination of assets and superannuation will be in your interests to retain. Often a good mortgage broker will also be able to advise you about options available to you which you may not have otherwise considered.
A property settlement formalised by properly drafted Consent Orders or a Binding Financial Agreement will provide you with certainty, security, and the ability to enforce the agreement reached if the other party changes their mind in future.
6. Review your estate planning arrangements
Separation is often a good time to consider your estate planning arrangements, particularly for separated couples with children, and people who have repartnered after a separation. We offer reduced rates for our estate planning services for existing family law clients.
If you have been through a separation, and are seeking advice in relation to your entitlements, contact Robinson + McGuinness Family Law for an appointment on (02) 6225 7040, or email us with your enquiry at [email protected].