Meeting with Amanda Delvin

Putting off property settlement? Now’s the time to get it sorted

Putting off property settlement? Now’s the time to get it sorted
February 27, 2020 /

Has the prospect of paperwork and having another argument meant your property matters still haven’t been sorted out?  Now may be the time to make that financial break from your ex.

Why should I?  a second programme is about to be rolled out from 2 March 2020 targeting property settlements matters. The scheme is again designed to identify, case manage and resolve small property matters in an effort to reduce delay and promote parties “taking ownership of their dispute resolution planning at an early stage”.

Whether you fall under this new scheme or the discrete property list, it is now quicker and easier than ever to get your property settlement.  

What happens if I don’t? Until you formalise your property settlement, you are not yet financially separated from your former partner or spouse. This means that any asset or debts either of you have is usually included in the “property pool” to be divided between you. There are also time limits which apply for sorting out property settlement as well which you don’t want to miss.

What do I need to do? Talk to one of our dedicated family lawyers about how property settlement works, getting it sorted out by agreement or taking advantage of the Court’s new schemes to get it resolved as quickly as possible. Call us on 5576 9999 or message us to book a free 30 minute consultation.

Should you wish to download a copy of this article please click HERE.

Property Settlement After Death

Property Settlement After Death
February 5, 2020 /

When one party passes away during property settlement litigation, it’s not the end of the matter. Proceedings can still continue with the estate of the deceased party becoming the litigant AND … some or all of their assets can still form part of the matrimonial property pool to be divided between the parties.

As a recent case highlights, navigating this area is not simple and if it’s not done correctly, costs orders are at stake.

The Wife commenced Family Law property settlement proceedings and a few days later, the Husband passed away. After separation the Husband had completed a new Will naming his sister as the executor and his children as beneficiaries, and changed the beneficiary of a life insurance policy to a Trust which was to be managed by the executor for the benefit of his children. After the Husband’s death, the insurance payment was made into the Trust.  The first dispute which arose was whether the insurance money formed part of the estate which could be dealt with in property settlement. Ultimately it was conceded by the estate that it did, however by this time the lawyers for the estate had paid out over $28,000 for legal advice to the executor with respect to the litigation from the insurance funds. (The estate was at that time represented by different lawyers).  The Wife brought an application with respect to the payment.

The Court refused the Wife’s application to join the estate’s former solicitors or to recover the $28,000. The Court said that this was  a legitimate expense as the executor/Trustee was well within her rights to obtain legal advice for the purposes of administering the estate, and for that advice to be paid for from the estate funds. The sum paid was around 5-6% of the money when the Wife was only applying for 80% of the money, so there was still enough to satisfy the Wife’s claim in property settlement at the time. The Court did note an “illogical” and “curious aspect of this case” that only the one payment of around $28,000 was sought to be recovered on the basis it would defeat the Wife’s claim in property settlement, however the estate had paid more legal fees after the $28,000 and yet the Wife was not claiming to recover those costs.

There were other blows for the Wife’s case. The Court also refused to order the previous solicitors (not the estate) to pay any of the Wife’s costs on an indemnity basis, there were simply no grounds for the order to be made against the lawyers themselves, let alone on the indemnity basis.

The Court also refused the Wife’s application for an order that the legal advice obtained by the executor be provided to the Wife.  Legal advice is, of course, protected by legal professional privilege – a long established right that is crucial to the fair operation of the legal system.  The Wife had claimed that the privilege had been waived (an argument based on the particular facts of the case).  The Judge did not agree that the executor had waived the privilege over that advice and the Wife’s application was described as “a fishing expedition”.

The Court did however restrain the executor from spending any more estate money, including on legal fees, as this further depletion could start to defeat the Wife’s claim in property settlement. This order was made notwithstanding the Judge’s acknowledgment that an executor is entitled to have reasonable litigation expenses paid for from those funds.  The Judge took into account that the Wife was in difficulty paying her legal fees as well and considered that a restraint would “put the parties on the same footing”.

Overall, some of the wife’s application was successful, but most of it was not. The basis of the Orders sought by the Wife was changed between filing the application and the time of the hearing, so the arguments advanced at the hearing were different from how the case, and the documents, had been prepared. Costs of the application are being dealt with separately but no doubt this will be hotly contested as to bring, and defend, applications like this would have involved significant cost for all parties involved. Of course, in light of the order not to expend any more funds, the executor is now in a difficult position.

Clearly, this was not your average family law case.  However, our experience is that links between estate issues and family law issues are quite common. We have specialised teams of lawyers both in family law and in all aspects of estate administration and litigation, and can assist with complex issues such as arose in this case.    

Call us on 5576 9999 for a free 30min consultation with one of our lawyers.  

The full case reference is Chards & Echols as Executor of the estate of Chards [2019] FCCA 2433

Should you wish to download a copy of this article, please click HERE.

Get it done right the first time

Get it done right the first time
January 13, 2020 /

Prenuptial Agreement and lawyers fees

Financial Agreements, including prenups, are really important documents because they often deal with hundreds of thousands of dollars in assets, superannuation and debt. It will finally determine a wife, Husband or de facto partners claim for a large amount of money.

So it’s absolutely crucial that they are done properly.  If not, then a Court can set them aside and this means that your Agreement is not worth the paper it’s written on.

This happened in a case recently before the Family Court about a prenuptial agreement. The parties separated and the Wife sought spousal maintenance from the Husband. The Husband sought to rely upon the prenuptial agreement that said no spousal maintenance should be paid.  The part of the Agreement dealing with spousal maintenance was not properly drafted in accordance with s90E of the Family Law Act, the Court set aside the Agreement and ordered the Husband to pay $500 per week to the wife and various other expenses (for any geeks out there see Guild & Stasiuk [2019] FamCA 167).

Be confident that your Agreement was done right the first time by retaining an experienced, specialist family lawyer. It’s well worth it for both of you.  

For assistance regarding Binding Financial Agreements, contact our experienced family law team on 5576 9999.

Should you wish to download a copy of this article please click HERE.

More experiments in the family courts – another pilot programme for property settlement announced

More experiments in the family courts – another pilot programme for property settlement announced
December 15, 2019 /

Lawyers and separating couples who have property settlement applications before the Court in Brisbane may have already met Registrar Turnbull and the Discrete Property List pilot programme.

Well there is another trial programme being piloted in Brisbane for property matters.

Separated couples whose property pool is less than $500,000 are being diverted to the government’s new Small Claims Property Pilot.  Why? This programme ‘aims to ensure families do not exhaust their limited assets on legal expenses’. It is also another attempt to streamline the Court’s procedures, reduce caseload and thus reduce delay and expense for people seeking access to the Courts for property settlement.  

The Small Claims Property Pilot will commence in January 2020 in Brisbane, Parramatta, Adelaide and Melbourne. The Pilot will run for 2 years.

For assistance in navigating property settlement matter, contact our experienced family law team on 5576 9999

https://www.attorneygeneral.gov.au/media/media-releases/pilot-program-save-time-and-money-separating-couples-29-november-2019

Should you wish to download a copy of this article please click HERE.

What’s in a word? Family law orders – words really do make a difference

What’s in a word? Family law orders – words really do make a difference
December 11, 2019 /

A recent case highlights how careful you have to be when preparing Court Orders

In a de facto property settlement, the Order for division of the property included a requirement for the de facto wife to pay the de facto husband a fixed sum of money, and if she could not make the payment within 60 days then a house was to be sold and the fixed sum paid from the sale proceeds, with interest. The effect of the Order as a whole was that the net property pool was divided 70% / 30% between them. 

The payment could not be made so the de facto wife sold the property and paid the fixed sum (with interest) in accordance with the Order.

The issue that arose was the house sold for a higher amount. At trial the value for the house was given as $725,000 (and the 70% / 30% split calculated on that basis) but the house then sold for $920,000. The Orders meant this increase was kept by the de facto wife.

The De facto Husband brought an application on the basis that the De facto Wife had defaulted and caused the sale of the house and by doing so she received more than 70% of the pool contemplated in the Orders. He sought Orders to remedy this.

The Court did not accept this or make any other Orders as;

  1. there was no default because the payment was made in accordance with the Order as it was written; and
  2. the Order did not say that he should receive a payment being a percentage of the total net property pool. The Order said he should be paid a fixed sum, the result of which was a 70% / 30% at the time. The effect is that any change in the value of the property would “lie where it fell”, meaning the one party would have to bear the result in any change in value, whether higher or lower.

Crafting property Orders are not simple. There are traps and pitfalls.  Call 5576 9999 to speak to an experienced family lawyer who can assist you to navigate this complex area. 

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCCA/2019/1880.html

Should you wish to download a copy of this article please click HERE.

Important Issues to Consider When Buying a Business

Important Issues to Consider When Buying a Business
November 10, 2019 /

If you are planning on buying a business, whether it be a small coffee shop or a multi-million dollar construction business, there are a number of important factors that you need to take into consideration.

Some of the main issues to consider are:-

  1. Buying entity/structure

Before you sign a contract, you need to get good advice as to the proper structure for your business and the correct buying entity.

For instance, it would often be beneficial for you to establish a discretionary trust with a corporate trustee to buy the business.  This structure can have the benefit of asset protection for you as well as having tax benefits.

If the business is heavily reliant upon certain Intellectual Property (“IP”), such as a trademark or patent, you may want to establish a further separate entity which would own that asset so that it is protected from the other assets of the business. 

  1. Due diligence

It is of course always prudent to carry out extensive due diligence enquiries of the business.  Due diligence can cover a vast array of issues and you should seek the assistance of your solicitor and accountant or financial adviser in relation to the various due diligence enquiries which may be necessary.

Common due diligence investigations are:-

  • Business name – you need to ensure that any name that you are acquiring with the business is properly registered and owned by the party selling the business.
  • IP – again, you need to ensure that any IP is owned by the party selling the business and that you will be taking ownership of the IP upon settlement.
  • Figures – you will of course want to ensure that any figures provided to you by the seller are accurate and you should have your accountant and financial adviser carefully scrutinise these.
  • Regulatory requirements – it is crucial that you ensure that you will have all of the necessary licenses, permits and qualifications to enable you to lawfully operate the business.
  1. Lease

A major part of buying a business is dealing with the lease for the premises from which the business operates.  You will need to determine whether you will be taking an assignment of the existing lease or negotiating a new lease with the landlord.  In either case, you will need to obtain the agreement of the landlord and ensure that you are satisfied with the terms of the lease.

  1. Employees

Of course, the most important part of any business is the staff. You will need to determine which staff you wish to retain, and enter into appropriate agreements with them.

The issue of who pays accrued entitlements of the staff needs to be dealt with in the contract.  Generally, an adjustment is made in the buyer’s favour for a portion of accrued leave and long service leave entitlements. 

  1. Stock

Stock is a crucial component of some businesses, and not so important in other service-based businesses.  In any event, the contract will need to stipulate whether or not stock is included in the purchase price. If not, a maximum figure you will be required to pay in addition for stock should be included in the contract.  A stock-take would then need to be carried out prior to settlement. 

  1. Restraint

In buying the business, you will of course want to ensure that you are protected against the seller opening a similar competing business nearby, or going to work for a competitor.  It is therefore crucial that you include appropriate restraints on the seller in the contract. 

Restraints must be reasonable and carefully drafted, or they will be found to be unenforceable by a court. 

  1. GST

Generally with a business, you will be buying the business as a going concern, and therefore, GST will not be payable in addition to the purchase price.  You will of course need to meet the requirements of the “going concern” provisions in the GST legislation and in particular, your buying entity will need to be registered for GST.  There will be some cases where the purchase doesn’t qualify as a going concern, and accordingly it is important to get good advice in this regard. 

  1. Earnouts

In some businesses, you will want to ensure that the seller stays in the business for a period of time after settlement to ensure continuity and also to ensure that the purchase price is justified.  In these cases, you can require that the seller remain in the business for a fixed period of time and that a portion of the purchase price will be contingent upon certain sales or profits being achieved.

Every business is different and presents its own challenges. If you are going to pour your heart and soul as well as a substantial amount of money into a business, you need to give yourself every chance of succeeding. This means doing your homework before you buy!

If you wish to download a copy of this article please click HERE.

Moving in together? In a de facto relationship?

Final means final – no second bite of the cherry in parenting matters

Final means final – no second bite of the cherry in parenting matters
August 27, 2019 /

The Family Court of Australia has recently reiterated in a Brisbane case that final orders means final.

Where a final parenting order has been made, a parent must show a material change of circumstance since the final orders were made before the Court will allow a parenting matter to be re-litigated and make more parenting Orders.  

This case concerned one child, who was 3 years of age when the Court made final parenting orders. The child’s father applied to the Court again for new orders almost 2 years afterwards. The father sought to relitigate the order because he alleged the mother failed to comply with the final order, which the mother disputed, and relied on a change in his relationship and household status, taking up employment in another suburb and poor communication with the mother as changes which meant the final orders should be altered.

The court stated that ‘Although trite, it is worthwhile making clear that the father needed to demonstrate not just that there had been a change in circumstances, but that the change was sufficiently significant to warrant revision of the existing orders in any particular way’

This means it’s not enough for there to be a change of circumstances, but a parent must show that this change was so significant it warrants the re-opening of litigation in that particular case.  

What might be important in one matter might not be in a different set of circumstances.

The Judge was not satisfied that in the circumstances of that case that those changes were, individually or cumulatively, significant enough to entertain further litigation regarding the child. On appeal, the Family Court upheld that decision.

If you have final parenting orders and you are not sure if you meet the criteria to seek different orders, or the other parents wants more litigation and you want to know where you stand, see one of our experienced family lawyers by calling us on 5576 9999.

Case link;

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FamCAFC/2019/137.html

Should you wish to download a copy of this article please click HERE.

“Never Judge a Book by its Cover” – so said my Mum: Grants of Probate in Queensland

“Never Judge a Book by its Cover” – so said my Mum: Grants of Probate in Queensland
August 20, 2019 /

During many an appointment with grieving family members, one of the areas of law I advise on, is whether a grant of probate is necessary in order to proceed with the administration of an estate.  When charged with the responsibility of realising and administering an estate, aka being appointed as an Executor, the Executor must consider whether applying for a grant is necessary.

Generally, in Queensland (noting that all States and Territories in Australia have differing rules and legislation regarding wills and estates) informal administration is preferred.  “Why incur an expense in obtaining a Grant if it’s a simple estate – amirite?” Well, in circumstances where an estate is comprised of even the most modest assets there are many pitfalls for the novice Executor.  What if you have the wrong will?  What if there is an informal will that you don’t know about until it’s too late? What if there is a debt that you simply weren’t aware of?  It is recommended that the Executor apply for a grant, not only for the protection afforded by the Court’s imprimatur that you have the correct will, and security from estate creditors wrongly chasing you down, but also because many asset holders who will simply refuse to deal with the Executor until your appointment has been sanctioned by the court.

So, what is a Grant of Probate?” I hear you say indistinctly while reading this. To put it in to basic terms, it’s a piece of A4 cardboard which wears a big red, circular, seal.  This cardboard is stapled to the front of a photocopy of the Last Will and Testament of the deceased.  The seal is then embossed with the imprimatur of the Supreme Court of Queensland so that it indents all pages of the photocopied Will.

Now I’m sure you’ve all heard the saying “Never judge a book by its cover” and while my explanation of the physical appearance of the grant sounds simple, its effect and operation certainly isn’t.  The grant is both complicated and serious – I like to describe it as a passport; a critical document that allows you to travel from place-to-place while confirming who you are and that you’re not a stateless person purporting to hold some kind of authority and sense of identity.  An Executor’s passport allows the Executor to attend the offices of asset holders on behalf of the deceased and is the Executor’s valid authority to collect in the assets, liaise with creditors, satisfy payments of liabilities and then attend to the allocated distributions to those intended beneficiaries.

As a general guide, the following institutions will require an Executor to obtain a Grant of Probate:

-Bank accounts with certain thresholds, i.e. CBA requires a grant for over $50,000.00;

-Aged care facilities holding refundable accommodation deposits;

-Brokers and financial advisers managing the deceased’s share portfolio.

If you need assistance in applying for a grant of probate, then we invite you to contact our office and arrange a free 30-minute free consultation with one of our estate administration solicitors.

Should you wish to download a copy of this article please click HERE.