Family Law and financial disclosure: What you need to know

The Family Law Act 1975 and Federal Circuit and Family Court of Australia (Family Law) Rules 2021 sets out the obligations on parties to provide full and frank financial disclosure of their financial circumstances. Parties have an ongoing obligation to provide information and documents relating to their income, property and financial resources. Having transparency regarding the financial circumstances of the other enables parties to be able to negotiate a robust settlement, and indeed, a financial settlement cannot occur if the asset pool is unknown.

What information do I need to provide?

You have an obligation to provide information and documents in relation to income, financial resources, assets, liabilities, and superannuation in which you have a legal or equitable interest.

The obligation to provide financial disclosure only extends to documents which are in your possession or control. Generally, a party is able to access documents such as bank statements, Notices of Assessments issued by the ATO, superannuation statements, etc. A party may receive a request for disclosure documents where they cannot fulfill the request. This could occur, for example, where disclosure may be sought in relation to the quantum of a distribution received from an inheritance or compensation award, when the amount may not yet be determined.

Do I need to comply with all requests?

A request for disclosure should be answered within a reasonable timeframe, subject to the request for documents being reasonable, and relating to the issues in dispute.

If you have received a request for financial disclosure which you think is unreasonable, seek legal advice.

Is it sufficient to provide information about my financial circumstances?

By agreement, parties can exchange information relating to their financial circumstances, as opposed to a formal exchange of documents. However, a party is entitled to request documents, if that remains their preference.

Can I provide disclosure of the value of my interest in property at the date of separation?

It is necessary to provide financial disclosure in relation to the current value of assets, liabilities and superannuation. Although the value of property at the time of separation may be a relevant consideration, as well as what contributions have been made by each party following separation, generally the Court requires the most up to date information about the value of assets, liabilities or superannuation, rather than adopting the values of property as at the date of separation.

Do I need to provide more information after we have participated in an exchange of financial disclosure?

The obligation to provide financial disclosure regarding your financial circumstances is an ongoing obligation. It is necessary for parties to provide updates in relation to their financial circumstances  until a property settlement has been finalised, either by entering into Orders or a Binding Financial Agreement. That obligation exists irrespective of whether there has been a request for updating financial disclosure. If your financial circumstances materially change, there is an obligation to inform your former partner about that change.

What does this mean for you?

If you are uncertain about your legal obligations in relation to the provision of financial disclosure, or your former partner is refusing or delaying the provision of financial disclosure, you should seek legal advice.

It is prudent to obtain advice tailored to your circumstances from a family lawyer, ideally as soon as possible after separation, in order to preserve your interests. Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.

Author: Margot McCabe

Assets and Financial Resources You May Not Be Considering in a Property Settlement

Each party negotiating a property settlement has a duty to the Court and to each other to give full and frank disclosure of all information relevant to their financial circumstances in a timely manner. When identifying assets that form part of a property pool with your former spouse or partner, it is typically categorised by any interest held in:

• Real property;

• Bank accounts and cash;

• Cryptocurrency;

• Shares;

• Trusts interests;

• Mortgages and/or loans/lines of credit;

• Motor vehicles;

• Superannuation interests; and

• Inheritances.

Beyond these, there are further assets and financial resources that often fail to be considered by parties which may be relevant in determining the entire property pool available for division. These may include:

• Loyalty point programs such as:

1. Frequent Flyer Points; and

2. Hotel points.

• Long service leave entitlements;

• Windfalls such as lottery winnings and/or personal injury compensation payouts;

• House contents such as:

1. Furniture;

2. Electronics;

3. Artwork;

• Pets; and

• Debts such as gambling or personal loans through friends or family.

Some of these items can be difficult to value, given subjectivity, depreciation, or their assumed nil cash value. Whilst frequent flyer points and hotel points may have nil cash value, they still hold a value and they can usually be transferred between parties.

Long service leaves accrued during a relationship may be considered valuable and relevant to the property pool, particularly if it has been accrued over a number of years.

Household contents and furniture are typically valued by their second-hand sale worth, with artwork and other sentimental items often having a higher value to a party, depending on when or how they were acquired (or if for example, they were inherited).

Pets are a complicated ‘asset’ and may have a significant emotional value between parties. This can include the pet’s monetary value from a breeding perspective to a simply strong emotional attachment. ‘Custody’ issues can also arise about jointly owned pets.

Personal loans through family or friends or gambling debts may have been hidden by a spouse from their partner. It is important to identify if these exist so that the entire property pool can be accurate determined and dealt with as part of any settlement.

It is important to note that the above information is relevant to family law and may not be accurate under other areas of law, such as in cases of bankruptcy.

If you or someone you know is considering your assets and financial resources between an ex-spouse or partner, it is important to seek support and advice from those best qualified to help you. Robinson + McGuinness is available to assist you with your family law matters, no matter how complex.

If you would like advice in relation to your family law matter, contact our office at (02) 6225 7040 or by email at info@rmfamilylaw.com.au or get started now online to make an appointment with one of our experienced family lawyers.

Author: Emily Nicholls