One of the first questions when completing a property settlement is “What is the asset pool?” By quantifying the assets, liabilities, superannuation, and financial resources of the parties, parties can then start to think about how the asset pool will be divided between them, having regard to their respective contributions and future needs.
It is important that the asset pool is identified before any settlement negotiations take place, the parties attend a mediation/conciliation conference, or the matter proceeds to a hearing.
The value of some assets, such as bank accounts, shares, and accumulation superannuation interests, are usually easily identified by obtaining the most recent account statement. The value of other assets however can be more difficult to identify, examples of such assets include:
Motor vehicles;
Collectable items, including antiques and vehicles;
Real estate;
Businesses; and
Defined benefit superannuation interests.
If parties can agree on the value of the above types of assets, the agreed value can be adopted for the purposes of the balance sheet and the property settlement. For example, parties may agree upon the value of a car by obtaining a RedBook valuation, or the value of real estate by obtaining a market appraisal from a real estate agent.
If there is no agreement as to the value of a certain asset, the parties will need to engage an independent expert to value the items. When obtaining a valuation, it is important to:
Agree upon who will carry out the valuation – the valuer should be appropriately qualified to carry out the valuation;
Agree upon who will pay for the valuation – it is common for valuation fees to be shared equally between parties;
Jointly instruct the valuer in writing – it is inappropriate for parties to individually speak with/instruct the valuer; and
Request that the valuer provide their valuation in writing.
If no agreement can be reached about the appointment of a valuer, and the matter is in Court, the Court has the power to appoint a valuer (known as a Single Expert).
If the matter is in Court, once a joint valuation has been obtained, the parties are bound by the value unless otherwise agreed or ordered by the Court. If one party does not accept the valuation, they can ask questions of the valuer in accordance with Division 7.1.6 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021; obtain a second valuation and/or seek permission from the Court to rely upon a second valuation (known as an Adversarial Expert Report); this is not a straightforward process, and specialist family law advice should be sought prior to making an application to rely upon an Adversarial Expert Report.
If you have questions about valuations and your property settlement you should obtain specialist family law advice. Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.
Author: Peta Sutton, Senior Associate