FAQ’s – Separating

When does a Financial Agreement come into effect?

Whilst you can stipulate how you want to divide property in the agreement theoretically, the practical division of assets and liabilities does not occur until either party has signed a separation declaration. Read more about when a financial agreement comes into effect.

What happens if all the assets aren’t disclosed?

The parties have a duty of disclosure to the court as well as each other. If one party tries to hide Assets or liabilities that effect the other party the party could go to court and argue to have the agreement set aside. Read more about full disclosure in a financial agreement.

We each have separate Superannuation which will stay separate, do we need to include it in our Financial Agreement?

Even though the intent remains the same (ie. both parties agree not to make a claim on each other’s super as per clause 3 of your Agreement), each party still needs to be informed as to what that super actually is. Read More about declaring Superannuation assets in Financial Agreements

Do you have to pay Capital Gains Tax on property transfers?

Capital gains tax, stamp duties and other charges will not apply to property that is transferred following breakdown of a relationship. In order to secure this exemption, there must be formal documentation, such as a Binding Financial Agreement or Consent Orders. Read more about CGT and property transfer.

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How long do we have to be separated before we can get a divorce?

You have to wait at least one (1) year after separation before you can file an application for divorce in the Family Court. However you can determine how you will manage the property settlement anytime after separation .

My relationship with my husband has broken down and we want to separate but he can’t afford to move out. What can we do?

The Family Law Act does allow couples to be considered separated even if they live under the same roof. Section 49 defines separation as;

“(1) The parties to a marriage may be held to have separated notwithstanding that the cohabitation was brought to an end by the action or conduct of one only of the parties.

(2) The parties to a marriage may be held to have separated and to have lived separately and apart notwithstanding that they have continued to reside in the same residence or that either party has rendered some household services to the other.”

My wife and I are separating and we want to take care of the financial side of things. What are our options?

You can either make a Financial Agreement or apply to the Court for Consent Orders. If apply to the court it must be done within 12 months of the divorce.

My wife and I both have super funds, the difference between balances is 60K so she wants 30K of mine – however she wants that as cash payment and then nothing deducted from my super. Can you do this in an agreement? I will be paying her $200K for the house and would need to borrow another $30K to do this.

Certainly you can pay a cash amount in leu of splitting your super.

Couples often opt to pay a cash amount rather than go through the hassle of formally splitting one party’s super because a cash amount can be used now. Whereas a transfer of a super interest must be preserved until retirement age which may or may not be helpful depending upon your circumstances. You will however need to consider the interest you would be paying on any amount borrowed to compensate for the super split.

If you elect to split your super you will need to include provisions in your binding financial agreement which provide instructions for your superannuation fund trustee.