As accountants you are frequently the first port of call when
parties separate. Clients come to you seeking advice as to how to
structure their finances in circumstances where they are now
separated. This may be particularly important when parties are
engaged in a family business or company and they need advice as to
how to manage their affairs moving forward.
It is therefore important, when providing your preliminary
advice to clients, or otherwise taking your instructions as to how
to manage their affairs moving forward, that you are aware of the
client's duties under the Family Law Act.
Most importantly, you need to be aware that the parties have a
duty to provide full and frank disclosure to the other party in
relation to all assets and liabilities under the Act.
The Family Law Rules specifically require particular documents
in relation to different assets and liabilities, including
statements, financial statements, tax returns etc. that go towards
any asset or liability that either party have an interest in.
This means, that a party cannot simply obfuscate those duties by
transferring interest they have to third parties to minimise their
interest in particular assets. Should parties do so, the court has
the power to include those interests (transferred to third parties)
to be considered as part of the net assets, and step in and prevent
such transactions occurring.
As a starting point, under the Family Law Rules the parties must
disclose to each other the following:
Their income, and any other benefits they receive as part of
their employment (including income that is paid to another party,
person or legal entity such as a trust or company);
Any interest that they have in any property (including
residential property such as a house, unit or vacant land but also
property that is owned by a company or trust, shares, and any other
property that they own either in their name or jointly with any
other person or entity;
Any other financial resource they have;
Any interest they have in a company or trust, whether or not
they think that they have the ability to control that entity;
Any equitable interest they have in any other property (such as
property that is going through probate or that is not in their name
but they otherwise have an interest in);
Details of any that have been sold since separation and in the
twelve months immediately before separation;
All liabilities owned, whether in their sole name or jointly
with any other person.
Should your client have a family law issue that requires the
production of such disclosure or have any questions or difficulties
with providing that information (such as one party has retained all
the documentation relating to that interest) then it is important
to contact a lawyer who specialises in Family Law.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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