Structure of Properties when divorcing?

[thatbum]

I believe that any future property division by a court will be based on what you own at the time of the hearing, not at the point of separation. A good reason to finalise properly now.

Is that right ThatBum? Mr Bum?

Yes its the asset pool at the time of the hearing. Its all back on the table potentially (well it never came off the table).

The court does take into account assets acquired after separation as a contribution on behalf of that party usually, but it can still create problems for that party if the fair split was always going to be skewed the other way.

Frankly keeping it "informal" is an enormous risk moving forward, and especially so for the party who intends to be earning more in the future.

Would anyone have an "informal" agreement when buying property or developing? Presumably not, so then why would anyone risk literally all their assets on an "informal" agreement for the sake of saving a few bucks on lawyers?

Ha - Mr Bum. Sure why not.

 

[Terry_w]

Would anyone have an "informal" agreement when buying property or developing? Presumably not, so then why would anyone risk literally all their assets on an "informal" agreement for the sake of saving a few bucks on lawyers?

Ha - Mr Bum. Sure why not.

Thanks Mr Bum.

You would be surprised (maybe not) at what people do informally. I recently seen a client who lent $350,000 cash to a complete stranger without any security and only a crappy self prepared contract. Turned out the borrower had been bankrupt several times, and had various aliases, and used the money to purchase a property in someone elses name.

Everyday I see people who have stuffed up the deductibility of interest on loans which will cost them $10,000s over the years too.

 

[techie]

Scary stuff. I'm single and accumulating assets. I would be happy to split 50/50 with the ex for assets acquired after marriage.

It's the assets before marriage that I'm concerned about.

What if your structure had another party, like a sibling as a beneficiary. Would that provide more protection from losing the property in a divorce?

What if you get a prenup that you can't divorce each other? Problem solved right?

 

[Terry_w]

What if your structure had another party, like a sibling as a beneficiary. Would that provide more protection from losing the property in a divorce?

No. that would not protect you. And what if the sibling had a divorce?

 

[jmillar]

Scary stuff. I'm single and accumulating assets. I would be happy to split 50/50 with the ex for assets acquired after marriage.

It's the assets before marriage that I'm concerned about.

I'm on the same page as techie.

What if:
Sibling A gives $1m to Sibling B
Sibling B gives $1m to Sibling A

Sibling A gets divorced, Sibling B recalls the loan. Would a structure similar to this be of any use?

Any recommendations on the best person to speak to with relation to this in order to make sure I'm structured properly sooner rather than later?

 

[property_girl]

Do you both need to have a lawyer if you are going through the family courts and CANNOT agree on what the 50/50 value should be?
Do they simply take a look at all finances, properties, assets and allow for each side to buy the other out? - Say for example someone wants to buy the other party out.

)

I can tell you what we did and it worked. First, we agreed, in a broader context, how the property division would go, eg. who would get what. We didn't want to drag it out. There was some horse trading.

We then made an appointment with Relationships Australia, who can act as mediators. That was a fairly arduous morning. First the counsellor/mediator sat with my ex alone, then with me alone, and then with both of us together. The counsellor from Relationships Australia drew up a detailed description of what we had both agreed to--in terms of child support, property division, maintenance, etc.

Then we each went to our own lawyer with what had been agreed to. This part I feel is important. The lawyer looks at the decisions you have both made and ensures that they are fair for whomever he/she is acting on behalf of. The lawyer (either yours or hers; in our case mine) then draws up all the necessary documents to be filed with the courts.

It's when you don't agree that (I feel anyway) the only person that wins is the lawyer. Best to give some things up. That's just my opinion. I wanted my children to see their father as much as possible and for him to be around as much as possible, so there was no litigation there.

 

[techie]

No. that would not protect you. And what if the sibling had a divorce?

So let's say my sibling and I ran a business (within a trust) in which my sibling's spouse had absolutely no involvement with whatsoever. Would the courts destroy this trust to retrieve assets and leave all those clients in limbo? Yes I can understand if my sibling had absolutely no other assets but I would like to think that the courts:

1) Would leave the business alone because another party is involved (moi) and my sibling's spouse had absolutely nothing to do with it
2) My sibling's ex-spouse gets a fair share of the assets accumulated by my sibling and the spouse during before and during their marriage in their own names or proved to be that they're the only beneficiaries to those assets
3) The children of my sibling and ex-spouse are looked after via those assets

 

[Terry_w]

So let's say my sibling and I ran a business (within a trust) in which my sibling's spouse had absolutely no involvement with whatsoever. Would the courts destroy this trust to retrieve assets and leave all those clients in limbo? Yes I can understand if my sibling had absolutely no other assets but I would like to think that the courts:

1) Would leave the business alone because another party is involved (moi) and my sibling's spouse had absolutely nothing to do with it
2) My sibling's ex-spouse gets a fair share of the assets accumulated by my sibling and the spouse during before and during their marriage in their own names or proved to be that they're the only beneficiaries to those assets
3) The children of my sibling and ex-spouse are looked after via those assets

No, the courts could attack the trust. It would depend how it was set up, but you would likely be dragged into it and suffer as a result.

Spousal maintenance is a separate matter than a property settlement.


BTW, I recall years ago that I owned shares in a private company with about 5 others. One of the other shareholders, who I barely knew, was going through a break up. I got a subpoena forcing me to supply my personal financials. The other 4 did too. I had never even met the woman, but apparently the bloke was previously boasting to the wife how good business was - but the company was yet to genuinely make a profit. She, naturally, was wondering when the profits went probably thinking he was hiding it from her.

 

[techie]

No, the courts could attack the trust. It would depend how it was set up, but you would likely be dragged into it and suffer as a result.

Spousal maintenance is a separate matter than a property settlement.


BTW, I recall years ago that I owned shares in a private company with about 5 others. One of the other shareholders, who I barely knew, was going through a break up. I got a subpoena forcing me to supply my personal financials. The other 4 did too. I had never even met the woman, but apparently the bloke was previously boasting to the wife how good business was - but the company was yet to genuinely make a profit. She, naturally, was wondering when the profits went probably thinking he was hiding it from her.

Thanks Terry. Useful info to know!

 

[wylie]

No, the courts could attack the trust. It would depend how it was set up, but you would likely be dragged into it and suffer as a result.

This is the advice from a senior family court lawyer I saw with someone I know well who was looking at the probability of his wife being able to get hold of assets in a trust that she had no part of.

Lawyer said that in her experience, the trust would be safe from her but because the husband would have access to funds in the trust, the wife would get considerably more of their personal asset pool to balance things out.

So, it is not safe from attack.

 

[techie]

This is the advice from a senior family court lawyer I saw with someone I know well who was looking at the probability of his wife being able to get hold of assets in a trust that she had no part of.

Lawyer said that in her experience, the trust would be safe from her but because the husband would have access to funds in the trust, the wife would get considerably more of their personal asset pool to balance things out.

So, it is not safe from attack.

Thanks Wylie. Is this when the trust has another party involved or not? Nevertheless its somewhat comforting to know.

 

[wylie]

Thanks Wylie. Is this when the trust has another party involved or not? Nevertheless its somewhat comforting to know.

The trust was operated by two siblings, and one of those was investigating the "what would happen" situations should they divorce. The wife had no say in anything to do with the trust.

I read a year or so ago about a wife, divorcing her husband, who was awarded half of his parents' assets that would be left to him via his parents' wills. His parents were still alive .

And, we have just handed our "waste of good air" brother with just shy of $1M after being told by our lawyer and barrister that "we are in the right". He was well looked after by the will, but wanted cold, hard cash. He will blow the lot, but we've made things as tight as possible so that he cannot come back to us for more. Being "in the right" doesn't mean you won't be screwed over by family with the help of clever lawyers. (And I know there are good lawyers, but we were dealing with one of the other sort. He and my brother matched each other in that way.)

 

[techie]

I'm on the same page as techie.

What if:
Sibling A gives $1m to Sibling B
Sibling B gives $1m to Sibling A

Sibling A gets divorced, Sibling B recalls the loan. Would a structure similar to this be of any use?

Any recommendations on the best person to speak to with relation to this in order to make sure I'm structured properly sooner rather than later?

JMillar, mate at the rate you're going, you're going to retire before most people even think of getting married I reckon you should find a like minded partner sooner rather than later that you can take the journey with. Later on in life, you're going to be streaks above the norm and if you're single, you might find yourself second guessing whether your partner is into you or your wealth.

 

[techie]

The trust was operated by two siblings, and one of those was investigating the "what would happen" situations should they divorce. The wife had no say in anything to do with the trust.

I read a year or so ago about a wife, divorcing her husband, who was awarded half of his parents' assets that would be left to him via his parents' wills. His parents were still alive .

And, we have just handed our "waste of good air" brother with just shy of $1M after being told by our lawyer and barrister that "we are in the right". He was well looked after by the will, but wanted cold, hard cash. He will blow the lot, but we've made things as tight as possible so that he cannot come back to us for more. Being "in the right" doesn't mean you won't be screwed over by family with the help of clever lawyers. (And I know there are good lawyers, but we were dealing with one of the other sort. He and my brother matched each other in that way.)

Curious to know if the asset division depends on 'who' files for divorce? E.g. if my wife wants to divorce me for another man, are her entitlements still the same?

 

[tobe]

'No fault' divorce is exactly that. it does not matter who 'files' for divorce, and makes no diference to the split of assets.

 

[property_girl]

Curious to know if the asset division depends on 'who' files for divorce? E.g. if my wife wants to divorce me for another man, are her entitlements still the same?

Legally I don't think it matters who files, but if infidelity is involved, you have more leverage in your personal negotiations. just my opinion. Happy to be corrected, but in our case the filer paid for legal documents to be filed with the court.

 

[Peter_Tersteeg]

My sister is currently going through a separation which will end up in divorce. Frankly I'm hoping she takes him (and his parents) for everything they're worth.

 

[Terry_w]

In Australia it doesn't matter who files.

Those interested in trusts and divorce should read the case of Spry v Kennon.

Dr Spry was a trust expert, barrister and had written a book on trusts. He was not a beneficiary of the family trust and neither was the wife. The trust was set up prior to marriage. He lost and the trust assets were deemed to be property of the marriage and taken into account in the split.

 

[property_girl]

This is a bit off track, but money can be hidden. Don't ask me how to do it, because I wouldn't know. My friend was married to a very well known bankruptcy lawyer (senior partner in a large law firm) who defended some high flyers. She married him owning assets. Fifteen years later he left her and filed for bankruptcy. In the meantime he had forged her signature in documents and signed her ppty over to him. She was in her 50s and had not a cent to her name. It was too expensive for her to try to find where he had hidden it all.

I believe in protecting assets but not in hiding money. I believe in karma and think it will come back to you.

 

[Paul@PFI]

Many successful Wickenby outcomes came from ex wives who spilled the beans to assist find offshore assets they couldn't locate.

Hell hath no fury as....