Earliest time to purchase a property after separation

[InveSTAR]

Does anyone know when you can enter a contract to purchase a property after a separation?

I have a client that wants to enter into a contract to buy a property.
He is a few months off a divorce settlement and wants to settle the property after that so it does not become part of the settlement.

Anyone here gone through a divorce? Are the settlement's straight forward? Can there be any delays?

If the divorce does not go through and the property settles before he is legally divorce does that mean his wife will be entitled to half and the property will be put on the market again? It would be sold at a loss in that case as there would be no equity in it yet.

Anyone care to shed some light?

If someone wants to buy a property when they are at a separation phase and not yet legally divorced can they do it? Is there a way?

 

[rugrat]

DO NOT QUOTE ME ON THIS.

I was of the understanding that what would matter here would be that he settled on the property after 'seperation' from his wife, not nessecarily the actual disolution of marriage.

 

[stargazer]

Hi

I went through a seperation not so long ago and to my understanding once the seperation papers are signed in the correct manner then each has accepted what has been agreed to.

You can be seperated and have your own assets as agreed and still be legally married. The divorce is the next step if chosen.

Some couples get back together and still retain their seperate assets rather than joining them again.


SG

 

[Simon]

If the settlement hasn't occurred then he can still buy whatever he wants.

He wont lose the property or have to give her half.

But the property settlement figure will be determined based on their "joint" asset and then a % split will be determined based on lots of factors - poss 50/50.

One party may have to pay the other party something to reconcile the final split so your friend will probably have a rough idea of what the decision will be and should make sure he has the cash available to pay her out if required before he comitts himself to a major purchase.

If his only asset is the property then worst case is it may have to be sold to pay her out. But she doesn't automatically have an entitlement to it.

But he could decide to raise the money elsewhere.

I have just been through this myself.

Buying the property before settlement could have some advantages.

Cheers,

 

[joycenmat]

That is no good and if your a property investor and married its still woth researching what happens in a divorce...

I want to get a relationship pre nup so whatever i buy that he does not contribute to i get to keep and he has no access.

Do i just see a lawyer?

 

[marg4000]

Sometimes the legal property settlement can be done before, or up to 12 months after a divorce.

I certainly would not consider buying anything until the property settlement is finalised.
Marg

 

[grossreal]

Hi all
structure structure structure
or should I say structure
you can buy with a marrige in a divorce even in gaol if the structure is correct.
and yes you can buy from in a gaol there is no rule to buying units in a trust you can't borrow but you can buy but thats a different post.
now there is a fancy bells and whistle company and trust (and I like it) taht you join the trust but if you attack the trust(as ina divorce or even as a bankrupt)it kicks you out of the trust
so the trust and the company stay intact so the attacker nukes him herself and has no access to the assets in the company or the trust
so you don't own the assett the company trust does
but if you then attack it for what ever reason it locks you out
cost 25k
so not cheap but very effective and yes it does not nor can it be attacked
because the person joining agrees to be kicked out so things like divorce court or liquidators can't get into the company as the person has left as soon as they attack
once you have a structure then you can build
so when should you build a structure
yesterday
but today would be a good time

 

[ozmale42]

Does anyone know when you can enter a contract to purchase a property after a separation?

I have a client that wants to enter into a contract to buy a property.
He is a few months off a divorce settlement and wants to settle the property after that so it does not become part of the settlement.

Anyone here gone through a divorce? Are the settlement's straight forward? Can there be any delays?

If the divorce does not go through and the property settles before he is legally divorce does that mean his wife will be entitled to half and the property will be put on the market again? It would be sold at a loss in that case as there would be no equity in it yet.

Anyone care to shed some light?

If someone wants to buy a property when they are at a separation phase and not yet legally divorced can they do it? Is there a way?

The divorce and property settlement are two separate things. You can do a property settlement anytime after separation up to a maximum of 12 months after a divorce.

In the property settlement your client and his/her ex partner will be required to list their assets at the time the property settlement consent orders have been lodged with the court NOT the assets at the time of separation.

I have just been through this thinking the opposite...Separated for 3 and a half years and have now finalised property settlement.

Since separation I -

1. Got a better paying job so was able to save a tidy sum in those 3 years
2. Traded my sedate family car in for an FPV GT
3. Increased my super balance despite GFC
4. Received an inheritence
5. Reduced the debt I took from the marriage down to zero
6. Continued paying 50% of the mortgage on our old family home and pay $2k a month in child support

When it came to property settlement all those things in 1 to 5 above were included in the asset pool. Lucky for me we had already agreed on a cash sum to me in return for her keeping the house and keeping our own super as the terms of our settlement.

Had we been in dispute she would have received a bigger slice if left up to a magistrate.

I would recommend anyone not to buy any shares/property until the property settlement is final.

 

[InveSTAR]

Thanks for the advice. Let me see if I get this straight.

The person I am referring to has been separated for 10 months, he has a divorce court settlement planned for January being 6 months away and 16 months into the separation.

They both want a divorce and are splitting current assets, not sure which way. The assets involve PPOPR and other properties.

I am helping him purchase a PPOR. He wants to buy a house now as he is currently living with relatives and it is not ideal.

If he purchases a house now and gets a bank loan just in his name, will this house be part of the divorce settlement in court in January? Will it become part of the assets that they split? There will be nothing it it if that is the case, no equity would be built yet but can the court make him sell it in January to give his wife half the value?

from my understanding you are saying that it will not be looked at as part of the pot of assets to be split because it was purchased after they were separated. Am I correct in my understanding?

 

[grossreal]

hi
don't buy in his name
buy in a structure
so the new co buys the property and then it rents to john and john rents a room to steve your client
steve owns the new co
thats fine
the company has bought an asset and has a tennant john ( arms lenght)
and john sub leases to steve
the structure of the new co is the main part
if he wishs to buy he need to wait and build up new co
when the dust settles then he has equity to buy in his own name
for me don't but at this stage in his name
put still invest
what you need is the following
a heads of agreement between both parties as he/she is looking at investing without the other party
(this is a legally binding contract)
once head is agreed then the new co is setup
and the other party has no control over the new co
the fancy trust is in case he /she marrys again and the same problem reoccures

 

[InveSTAR]

so he can be the director of a company trustee and the beneficiary of a trust that owns the property and that would be OK?

 

[grossreal]

so he can be the director of a company (yes) trustee (make his accountant this) and the beneficiary of a trust (yes)that owns the property and that would be OK? tell me I am wrong
I would make it a blood trust or a fancy trust but simple answer yes
for me I would like a bit beter structure
you are looking at two or three string holding a structure together but yes these string are correct

 

[InveSTAR]

The company itself would be the trustee of the trust and the accountant will be the settlor of the trust, I take it that's what you meant

I would like to help this client find a property and he has seen one that he wants to submit an offer for. Settlement after January is no option.

I might just have to speak to a solicitor to get facts clear in my mind

thanks for the help.

 

[grossreal]

Hi
accountants are not the best people for this
why they just don't know
you need to find a structure person in this guys area and build a structure and give that to the accountant to check
accountants build very bad structures
if you want to build a 3 storey walk up it like asking the gardener to design it
yes he has done lots of gardens but will he design it right
no
you need to find a structure person in your area and build the structure
and the foundation ( which most accountants won't know) is the most important
for me
get a structure guy there first and then the accountant
the structure guy is the designer the accountant is the builder
sorry but that the way it need to be done
we are all good at some thing
what are you good at
me not grammer

 

[Skeetaboat]

Just curious about this.. So a couple could be separated for 5+ years, and if one of them inherits money/assets during that time, the separated spouse would have a claim on that inheritence?

In such a circumstance, can an inhertence be protected by a trust structure?

What happens if the couple never get a divorce and the spouse who recieved the inheritence died whilst they were still separated but legally married but no money is left to the survived spouse? Would the surviving person be likely to win a contest of the will and obtain the inherited money?

Sorry to hijack...

Anyone know what would happen in this situaton?

 

[ozmale42]

Just curious about this.. So a couple could be separated for 5+ years, and if one of them inherits money/assets during that time, the separated spouse would have a claim on that inheritence?

Yes , the inheritence is included in the assets available for splitting

What happens if the couple never get a divorce and the spouse who recieved the inheritence died whilst they were still separated but legally married but no money is left to the survived spouse? Would the surviving person be likely to win a contest of the will and obtain the inherited money?

Yes, especially if the surviving spouse has the responsibility of raising children from that relationship. The worse situation is that, in the absence of a will, if the receiver of the inheritance dies before divorce is finalised everything goes to the former spouse by default even if there are children involved.

If there was a will it is not invalidated upon either separation or divorce. However a divorce will revoke any gifts to the former spouse stipulated in the will.

This is the NSW position anyway

 

[Amadio]

structure guy

grossreal: If this person is not an accountant, what would he call him/herself?

 

[Skeetaboat]

Yes , the inheritence is included in the assets available for splitting



Yes, especially if the surviving spouse has the responsibility of raising children from that relationship. The worse situation is that, in the absence of a will, if the receiver of the inheritance dies before divorce is finalised everything goes to the former spouse by default even if there are children involved.

If there was a will it is not invalidated upon either separation or divorce. However a divorce will revoke any gifts to the former spouse stipulated in the will.

This is the NSW position anyway

Thx for your reply. Where would I find the rules regarding this for Victoria?

There are no children in the marriage. It is a second marriage. I'm the child of the first marriage, hence my concern.

If the spouse inherits and then dies before ever finalising the divorce, but has a legitimate will that leaves 90% of the estate to their children and only 10% to the separated spouse, would the surviving spouse have a fair claim to contest the will?

Thanks again and sorry to OP for hijaking.. I think it's still somewhat relevant!

 

[tubs]

It's based on when the couple separated. So no property purchased since should be included.

Besides, if he borrows money for the property then there's no equity to add back in anyway.

 

[Bill.L]

Hi all,

Tubs,

It's based on when the couple separated. So no property purchased since should be included.

That's not entirely accurate.

A friend of mine is going through a divorce and I have been a sounding board for him and researching a few things in family law. The one thing I seem to keep saying to him is....

"Go and find out from your solicitor about that "

It seems the same advice is necessary here. There seems to be a big reluctance by most to seek legal advice at the appropriate time, during the divorce/property settlement would seem the appropriate time..

My understanding is that all family assets (as in net assets) are included in the property settlement. So if the existing property and super and cars and jewelery and bank balances add up to $1m (no loans), then in a 50/50 split they each get $500k.
Now if Fred goes and buys a house for $500k, with a $400k mortgage and $100k existing money, the new situation would be family assets $1.4m liabilities $400k, so net assets still $1m. This assumes no equity growth in the house between purchase and property settlement. If the property settlement is drawn out for a couple of years and the house grows in value, then things change, because the net asset pool has increased.

In short, the smart thing to do is get the property settlement sorted as the highest priority, yet many people who get separated seem to try and drag it out as a way at getting even with the former partner.

bye