Financial Issues & Settlements
Reaching a financial settlement is always a cause of considerable concern to anybody contemplating divorce proceedings.
We have a great deal of experience in negotiating satisfactory financial settlements for our clients. We are accustomed to dealing with clients with complex financial affairs, including businesses, trusts and family debt arrangements.
Our main concern is to ensure that robust negotiations are carried out and that the proceedings are not unduly drawn out. If you have children, their welfare will be a very important consideration in the financial settlement.
The first step to a fair settlement is to ensure we have a clear and accurate picture of the assets of each partner. This process is called disclosure. Both partners must make a full and frank disclosure of their financial position before negotiations can start. Once we have all the details of the assets and agreed upon their values, we can then open negotiations to reach a settlement.
Most cases are settled by negotiation between the couple and their lawyers. It is normal, however, to issue an application to court to resolve a financial dispute so that use can be made of the court procedure. Sometimes this is necessary to force the issue of disclosure or to establish a reasonable time frame for the process.
Only a very few cases are actually resolved by a final hearing in front of a judge.
Court procedures
In matrimonial and de facto relationship property settlements, the court has the power to make a variety of orders:
- Periodical payments (i.e. spousal maintenance).
- The transfer of property. This is where ownership of an asset is transferred to one partner as part of the overall settlement.
- The payment of a lump sum.
- Splitting of superannuation interests
The law sets out the criteria which must be taken into account when formulating financial settlements. There is no codified formula for the division of assets – it is a discretionary system. The courts must take into account, in respect of spouses and de facto partners, your income and earning capacity, your assets and financial resources, your housing needs, the duration of the marriage or relationship, your overall contributions, your health and any other circumstances of the case. The court is required to assess and evaluate these criteria when considering the claims of each of the partners.
Different courts work to slightly different time-tables, but generally you need to allow about a year to 18 months from the date when we make the first application to the final hearing.
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Prenuptial Agreements
We can help you create an agreement that reflects your intentions.
For those intending to marry, or intending to enter a de facto relationship, we can give you advice on how a pre-marital agreement or pre-cohabitation agreement (formally known as a “binding financial agreement”) may protect you from financial loss in the event of your marriage or relationship not lasting.
If you enter a marriage with your own assets, it usually makes sense to make a prenuptial agreement. Those approaching a second marriage may have a particular need to enter a prenuptial agreement in order to preserve assets for children from an earlier marriage.
There is a small charge for drafting a prenuptial agreement, in relation to the value of most assets protected by such agreements.
It is possible to enter a binding financial agreement before marriage, during marriage and even after divorce.
Binding financial agreements are enforceable by the Family Court of Australia.
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There are certain specified safeguards which the couple must adopt in order for the courts to uphold the agreement. One of the most important of these is that they should each have received independent legal advice before they entered into that agreement.
If you would like advice or further information about prenuptial agreements please contact our specialist team of Family Lawyers.
Spousal Maintenance
In circumstances where you are unable to support yourself adequately (and that does not mean that you are destitute or even that you are in need), and your spouse is able to support him or herself with extra money and resources available, your spouse can be ordered to pay a periodic or one lump sum amount for your support.
The Court’s power to award spousal maintenance applies to married and de facto spouses.
There are 3 types of Spousal Maintenance Orders:
- A Spousal Maintenance Order can be for Urgent Maintenance (by urgent it is meant before the case is properly put before the Court and before all proper evidence is available). In such circumstances the Court will take a pragmatic approach in order to alleviate hardship.
- An Interim Spousal Maintenance Order is made in a situation when all of the proper evidence is available and has been filed with the Court. An Interim Order is a temporary order and will last until the final resolution of the proceedings.
- The third type of Order that can be made is a Final Order for maintenance. A Final Order for spousal maintenance can be a considerable burden for many years to come.
A Spousal Maintenance Order ceases to have effect upon:
- The death of either party; or
- the remarriage of the party awarded the maintenance (unless there are special circumstances which would persuade the Court to end the Maintenance Order earlier).
In order to succeed in a spousal maintenance claim you must satisfy the Court that:
- The Payer is reasonable able to pay; and
- That you are unable to support yourself adequately by reason of:
- Having the care and control of a child of the marriage who has not attained the age of 18 years; or
- Your age or physical and mental incapacity for appropriate and gainful employment; or
- For any other adequate reasons.
The deadline for making a claim for spousal maintenance is 12 months after the date of a Divorce Order. The deadline for making a claim for spousal maintenance for a party to a de facto relationship is 2 years after the date of the end of the relationship.
Protective Measures
It is possible, but only by means of a Binding Financial Agreement, to oust the Court’s power to make a Spousal Maintenance Order, which is very often a sensible option for high income earners.
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Separation & Divorce
The breakdown of a relationship is an upsetting and emotional time.
There are many practical and legal issues which we will be able to help you deal with. All family breakdown legal issues are unique as are the individuals concerned.
Our team of experienced divorce lawyers offer extensive and expert advice and are wholly focussed on helping you through these difficulties. You will find your divorce lawyer sympathetic and sensitive to the issues you are facing. Most importantly, we support you with practical and clear advice to deal with these issues and the decisions you have to make throughout. You will find us robust in our dealings with other professionals on your behalf. Our absolute commitment is to keep in mind the best outcome for you, and your children.
If you believe your marriage has broken down, you may want to consider whether or not to start divorce proceedings, or for de facto couples you may wish to separate. Come and talk to us. Often we help our clients make clear and informed decisions about whether or when to separate or divorce.
We deal with many situations which are financially complex, whether the sums involved are substantial or not. One of our strengths is in dealing with difficult decisions concerning children, including cases with an international context. We can help if you need protection from violence or harassment; a divorce lawyer from our Brisbane South office can take immediate action on your behalf.
If you are affected by the situations we describe, and want further help, contact a specialist divorce lawyer at Madsen Law.
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De Facto Relationships
Many couples live together as de facto couples without formalising their relationship by getting married.
In fact, if you do this, you should known that under current law you have the same legal rights as married couples, provided you have lived together for at least 2 years.
If you and you partner are living together, we recommend you get advice to protect your assets in the event of a relationship breakdown. We can draft a cohabitation agreement (also known as Binding Financial Agreements – BFA). This agreement will record your intentions about your assets. It will cover the financial and property aspects of your relationship and how the assets would be divided in the event of the relationship ending. Cohabitation agreements sometimes include or specifically exclude provision for spousal maintenance in the event of a relationship breakdown.
As your assets grow, and the respective contributions of you and your partner change over the course of time, you may need to update your Cohabitation Agreement.
If you and your partner’s relationship dissolves, we are able to deal with any legal issues that arise.
If you are in a de facto relationship you will need a properly drafted Will. You should also reflect on the fact that a Will is able to be challenged by a de facto partner or in some circumstances a former de facto partner.
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Children & Parenting Issues
As a parent you will have to make difficult decisions about your children whilst you go through a separation and beyond.
Often it is difficult to agree on the best way forward with your partner. We are sensitive to these issues, and have many years of experience in helping parents to resolve these disputes in the best possible interests of both parent and child.
Often the biggest issues facing parents who separate is the care of the child disputes. If you and your partner cannot agree which of you your children should live with, or how often each of you should see the children, or how parental responsibility should be exercised, then either parent may apply to the court for a decision.
Sometimes one parent wants to take the children abroad to live. The consent of the other parent is needed to do this. If this becomes an issue, the parents may need help from the courts. Sometimes there is good reason to fear that your child may be taken from you permanently to live elsewhere in Australia or abroad. If this is an issue we can apply to the court for an injunction to prevent this.
If you and your partner cannot agree about financial or other arrangements that affect your children, either of you can apply to the court to decide any issue about the children’s care and well being. For example, you may disagree about which school your child should go to, or whether your child should have a particular course of medical treatment.
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Child Support
Australian law provides for child support to be assessed and collected by the Child Support Agency unless the parties have reached their own private agreement concerning child support.
The amount of child support assessed by the Child Support Agency to be paid is done by applying a formula under Part 5 of the Child Support (Assessment) Act 1989 (the CSAA).
The CSAA enables and in some cases obliges the Child Support Agency to assess and collect the child support liability and pay it to the carer.
The Child Support Agency assesses a payers obligations by applying what is known as the Child Support Formula.
The 8 key components of the Child Support Formula are as follows:
- What is each parents child support income (excluding a fixed sum for self-support)?;
- What is the combined Payee and Payer’s income?;
- What is the Payee’s income percentage of the combined income?;
- What is the Payee’s care percentage (the number of nights per annum the children spend in that person’s care)?;
- What is the Payee’s cost percentage;
- What is the percentage of child support being paid by the Payee;
- What is the prescribed annual cost of the child;
- Multiply the liable parent’s child support percentage by the annual cost of the child.
The Child Support Legislation provides no fewer than six opportunities for administrative (in house) review available to the parties. Lawyers are excluded from many of those stages and the parties are required to advocate their own cases without assistance.
The main areas where our expertise in child support matters can benefit our clients are as follows:
- Negotiating and drafting private Child Support Agreements (known as either Binding Child Support Agreements or Limited Child Support Agreements).
- Paternity Disputes: Seeking a declaration from a Court that a person is the parent of a child and should be assessed to pay child support or alternatively seeking a declaration a person is not to be assessed to pay child support because that person is not a parent of the child;
- Recovery of overpaid child support payments from the Payee;
- Applications to the Court for a Departure Order from the amount the Child Support Agency has assessed the Payer is required to pay;
- An application to the Court that child support be paid otherwise than by periodic payments. For example:
- payments to third parties such as school fees or payment by a lump sum payment or a transfer of property;
- An application to the Court to set aside a Binding or Limited Child Support Agreement;
- Appeals to the Court from Social Security Appeals Tribunal’s decisions on questions of law;
- To apply for leave from a Court to amend an old Child Support Assessment;
- To apply for maintenance for an adult child (over the age of 18, for example a University Student) or for a step-child;
- To apply to the Court for maintenance for child bearing expenses of an unmarried mother;
- To bring enforcement proceedings.
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Domestic Violence
Not all domestic violence is visible.
If you are experiencing harassment or domestic violence, you need to seek help urgently.
Our family lawyers can give you advice about making an application to court for protection. We know these steps are often taken in very difficult circumstances, and our family lawyers have helped clients through these stages. It is important to feel supported during this time. We are responsive in a crisis and can take immediate action.
Legally binding court orders can be made without the other person being informed of your application until after the court order has been made and served on them. These are called Temporary Protection Orders which prohibit the other person from using or threatening violence, or being abusive, harassing or pestering you.
The court can also make an order limiting and defining the occupation of your home. So for example, it can exclude the other person from the home altogether, even if he or she is the legal owner of that home.
Every case is different. Here are some of the steps we advise people in these difficult situations to think about:
- Report any incidents to the police.
- Go to your GP to document your injuries of violence or threatened violence if you have been assaulted.
- Ask a trusted friend to take photographs of any injuries.
- If abusive messages are left on your telephone or computer, then keep the messages.
- Make diary notes so that you can recall the dates and incidents.
These can all be important pieces of evidence if you decide to apply to court for protection.
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