2 months ago

How to Navigate Complex Property Settlements in Divorce

Divorce can be and often is stressful and emotionally intense and one of the most strenuous aspects of it is property division particularly where large stakes are at hand.
A complex property settlement under the family law through property settlement process deals with distribution of properties and debts that were earned, acquired and accumulated during the marriage period including but not limited to real estates, investment, business and other properties.
By identifying the procedures that are followed and knowing your legal rights, one should be in a better position when it comes to handling this stage.

1. Understanding the Legal Framework

Family Law Act 1975 of Australia best defines the manner in which property settlements subsequent to divorce or separation is executed.
It is the job of the court to make sure that the division of spoils is ‘reasonable, according to the parties’ endeavors and requirements in the future’.
This does not mean a 50/50 split, but rather a division that considers a range of factors, such as:
· The monetary and non-monetary support, for example, monetary support in form of wages, child care among others.
· Future requirements of each of the spouse (for instance earnings capacity, age, health and so on).
· The well being of the children, if any
To begin with, there is an exchange of both parties’ details about their financial state.
This entails the identification of all the assets, the balance of liabilities as well as all forms of financial capital.

2. Valuing Assets

It goes without saying that in a complex property settlement matters, the most delicate task may be the one related to the valuation of the issue’s assets.
In the event that the parties cannot assess the value of the asset themselves, professional assistance of the specialised valuer may be necessary in regard to the business or the piece of real estate, for instance.
This is especially important for high value assets because typically when the two parties do have divergent opinions on the value of the asset this will delay the process.
It's essential to include all types of property when assessing the value of the marital estate, including:
· Real estate: The family house, business properties and recreational houses.
· Superannuation: However, in Australia, superannuation fund is regarded as a form of property and can therefore be divided in middle of the duo.
· Business interests: If either the husband or wife owns a business, it is assets have to be evaluated.
· Personal property: Mobiles, silver and gold ornaments and Utensils, and other household articles.
· Financial assets: Savings accounts, share, investment.

3. Identifying and Managing Liabilities

Another important aspect that need to be addressed is the splitting of debts. This can include:
· Mortgages
· Personal loans
· Credit card debts
· Business debts
In this case, creditors’ list must be known all through the period before debt settlement starts; therefore, there is the need to understand all the liabilities that are outstanding.
The full contemplates the assets and the debts with regard to arriving at an equitable settlement. It may require discussing exact percentages for division of debts, or division of other liabilities stating that one party will take all the debts and assets on condition that they will be given more percentage of the assets.

4. Considering Tax Implications

One of the factors that cannot be overlooked in property settlements is taxation particularly where the property comprises of liquid investment or businesses among others.
Depending upon the kind of financial transaction, certain of them such as selling a business or an investment property will be subject to CGT.
This tax liability should be taken into consideration while reaching a settlement, so as not to encounter new and additional expenses after the divorce.
Moreover, there may be tax consequences of transfers of property such as Shares or superannuation as well, thus one may have to seek tax advice with regard to the tax consequences arising from the settlement.

5. Mediation and Negotiation

Divorce may turn out to be complicated depending on the cash assets that are at stake.
However, one may wish to note that these cases are best solved amicably by the parties involved and it is always advisable that they seek other means of solving their property issue other than heading to court.
Through mediation the two parties get assisted by a third party to arrive at a common solution. Litigation can be financially and emotionally draining and one spoils the rights of the other through a judge’s decision while this process can be less expensive and each party controls the final decision.
Sometimes the only solution is to go to court in case mediation does not produce any positive results.
In this case the court will in effect make a number of consequential decisions which will be informed by the evidence provided by the two parties to the trial.

6. Seeking Legal and Financial Advice

Given the fact that property division during a divorce is so compound reaching to an attorney and financial planner is very crucial.
You need a family lawyer because he or she will be in a position to explain your rights, and represent you in negotiating for the most favorable settlement.
A financial adviser or an accountant can also turn out to be quite useful in dealing with all tax aspects, estimating the worth of various properties, and giving suggestions about the split of superannuation also.
This is because in higher asset divorce cases, you may also require the services of the likes of business appraisers, forensic auditors, and property appraisers in order to fairly evaluate your strengths and weaknesses.

7. Finalizing the Settlement

After an agreement is made, the property settlement has to be documented in a legal manner usually in form of a consent order or a binding financial agreement.
This document shows as to how the marital assets and liabilities shall be split between the two.
Upon completion it is forwarded to the court for endorsement.
A court ruling of this agreement makes the agreement legal and enforceable upon the parties involved.

Conclusion

As much as every separation involves property division, it is wise to note that depending on the class of property, it may take a while hence contacting a lawyer is advisable.
By understanding your rights, being able to put value on your assets, and understanding the tax implications, everyone’s entitlements are addressed and the victims can now start a fresh future on a stable financial base.