17 Nov Disclosure For Financial Orders
After separation, a former couple usually needs to sort out the division of their assets and debts.
They can choose to do so privately with no court involvement or to apply to the Family Court for formalised family law orders.
The Court’s Requirements for financial family law orders
Under the Family Law Act (1975), there are time constraints on when financial family law orders can be sought.
Section 44 of the Family Law Act provides that no proceedings for financial arrangements can be instituted 12 months after a divorce is granted or 2 years from the end of a de facto relationship.
Furthermore, when parties apply to the court for alteration of property interests, either by consent to formalise orders or to seek a determination on a dispute, each party must provide full and frank disclosure of each party’s financial circumstances.
This is done through the provision of a Financial Statement and further affidavits or amended statements.
If a party does not disclose information or lies about their circumstances then the court can exercise its discretion in a manner against that party’s interest.
This full and frank disclosure is based on information about their current financial situation, not the circumstances that existed at the time of separation.
This means the division of property is based on a current pool of assets, liabilities and superannuation.
Issues that may arise relating to disclosure
The requirement for disclosure can cause concern for many clients.
For example, if the parties are separated but remain married, their former spouse can seek an adjustment of property years after the separation, provided there has been no final court orders made.
The cost of applying for a divorce can discourage couples from formally divorcing and they remain married ‘on paper’ despite having separated for a number of years.
There are several instances where parties where it takes parties several years to finalise their financial arrangements.
However, many are uncomfortable or resent the idea of having to disclose their current financial circumstances with a person they were partnered with years ago.
A major concern is that a former partner will discover they have since become more successful and acquired more assets, and then, their ex-partner can claim a share in their new success.
This means if, after separation, one party has gone on to purchase more assets, save more money, acquire more superannuation or otherwise build onto their asset portfolio, all this information will need to be disclosed fully to the Court (and to the ex-spouse) and it will impact the calculation when dividing up the total asset pool.
Resolving the issue of disclosure
Either party to a marriage can bring an Application for property settlement at any time after separation.
Thus, the sooner property settlement is formalised after separation, the better it is in regard to the protection of any future assets you may acquire.
This means the asset pool can be divided as it exists at the time, and both parties can move on and acquire new assets without fear of further claims being brought against them by an ex-partner.
If it has already been some time since separation and your property settlement was never formalised, it is suggested legal advice is sought.
A family lawyer can assist your case by considering the informal division of assets that occurred at the time of separation.
Although full and frank disclosure of your current financial circumstance will still need to be provided to the court, Justice Family Lawyers can help you to obtain final Financial Orders which mitigate the impact of the new assets on the division of property.