If you enter into, or are currently involved in, family court proceedings, in respect of property matters, you cannot “protect” your money, other assets or financial resources in the sense of “hiding” these from your estranged spouse.
Transparency is essential in detailing every asset, liability and/ or financial resource of the parties to a marriage.
A) Duty of disclosure
The law requires you make full and frank disclosure of all information which is directly relevant to any issue in the matter.
The information you provide will vary depending on the assertions and disputes in question, but can include pay slips/income statements, taxation returns, valuations and appraisals of assets including real estate and/ or businesses, superannuation statements, bank statements, company and/ or trust documentation and details of assets disposed of leading up to separation and since separation.
The “duty of disclosure” is an ongoing obligation placed upon both parties to a dispute from the commencement of proceedings until the matter if finalised by agreement or by way of court order. Accordingly, if any circumstance changes within this period, both parties, or the relevant party, is required to provide updated information about those changed circumstances.
Failing to make disclosure is misleading the court, which can result in various consequences ranging from a court order for specific disclosure to a stay or dismissal of proceedings and/ or a costs order against you. In a worst-case scenario, if one of the parties is found to have repeatedly breached his or her obligations pursuant to court orders, that party may be found guilty of contempt.
B) Protecting your assets
Whilst you cannot “hide” your assets per se, if you are thinking about separating from your spouse and making an application for a divorce, or are currently engaged in the process, there are some useful things that you can do to safeguard your assets pending resolution of your property matter, and to ensure your estranged partner does not “run off with the money” so to speak by doing things such as selling real property, drawing down on your mortgage, or otherwise reducing the asset pool and/ or removing it from the jurisdiction or at least from your control.
It is often true that one of the parties to a proceedings has an unfair advantage over the other as a result of documents which they have access to, resources at their disposal, or steps which they have taken prior to separation. Or it may be simply knowledge that one party has which is absent from the other.
So, one of the first things you can attend to is securing your email and any other platforms of online communication that you use. Most relationships result in parties knowing one another’s passwords, and so changing these will ensure your estranged partner cannot access certain communications between you and your friends, family or lawyer.
The next thing you can do, and should do, is to secure your banking procedures. One reaction to separation sometimes involves one of the parties to a proceeding, either because they’re worried about how they are going to cope financially, or as a means of “punishing” their estranged partner, withholding funds and/ or drawing down against the mortgage or overdraft and removing such funds obtained from your control and thus preventing your access to them. Thus you should ensure that all withdrawals require joint approval and that neither of you can access monies without the written consent of the other.
The third step you can take is to lodge a caveat over any real properties that are in your estranged spouse’s name and not in yours. It is important to protect your interests by lodging a caveat to ensure your estranged partner does not transfer, sell or gift the property to a third party nor borrow or take out any other securities against it.
The fourth thing you can attend to, and which is commonly overlooked, is creating a new will or testament or updating the one you have. It is not uncommon for one of the parties to a proceeding to pass away unexpectedly during the course of a separation prior to the parties’ assets being divided. What this would mean for you, if you don’t have a will, is that everything from your clothing to your jewellery to your finances to your share in the matrimonial home would pass to your estranged spouse under the laws of intestacy, which may cause distress for your new partner and / or surviving family. If you do have a will, and it leaves all or a majority of your assets to your estranged spouse, you will need to update this to avoid these potential consequences.
A fifth thing you can do at the commencement of separation is to change the nominated beneficiaries of your superannuation fund and any life or other insurance policies you may have. It is likely your estranged spouse will be the beneficiary and therefore receive these entitlements in the event of your death. So, it is important that these be changed to include your children or whoever you wish to leave such entitlements to, if that is what you determine should occur.
Finally, at the time of separation, or during the time leading up to it, if you are fearful that your estranged spouse, in reprisal, may damage any property jointly owned or individually owned by you, it’s a good idea to contact your local Magistrate’s Court and ask for an appointment to apply for an Intervention Order against your estranged spouse as an extra measure to protecting your assets. Alternatively, you could apply to the Federal Circuit Court of Australia for what is called a restraining order against your estranged spouse.
If you are currently going through a separation and your estranged partner has commenced property proceedings against you and requested certain information from you by way of disclosure, or if you are thinking about or have separated from your partner/ spouse but are unable to perform the preventative tasks referred to in this article without the assistance of a solicitor, come into one of our offices for a free 30 minute consultation with one of our experiences solicitors, and find out where you stand and what options are available for you moving forward.