Preparing an Airtight Binding Financial Agreements
Binding Financial Agreements (BFA), also referred to as “pre-nups” are created when two parties have made a fully informed decision to enter into a binding agreement. The creation of an Airtight Binding Financial Agreements requires the parties to disclose their financial position, provide reasonable time to consider the agreement and obtain independent legal representation to avoid any undue influence or pressure on the other party. This document effectively allocates assets and other financial resources in the event the marriage or relationship ceases. Whilst many people believe planning for divorce before the marriage begins is controversial or otherwise “unromantic”, a BFA is an integral part of prudent estate planning. This document is a mechanism similar to the preparation of a will or enduring power of attorney. Requirements of Creation To create binding financial agreements, several requirements must be met in accordance with the Family Law Act, including:
First and foremost, both parties must disclose their true financial or monetary asset position. In circumstances where one party attempts to hide significant assets from the spouse, the BFA may be set aside. The issue of timing is also paramount to enforceability. If you are planning on having children or have a significant life change coming up in the future, think about how these events will affect the BFA. The requirement of reasonable and fair provisions are also crucial to the legality of the document. If the document features overbearing provisions, causes unnecessary hardship on one party, or is unfair to the non-moneyed spouse, the Court may set aside the BFA. The last consideration, which is perhaps the most important, is the client’s receipt of competent independent legal advice and understanding of what constitutes unreasonable pressure, influence, demand, or conduct. If a person displayed behavior that is unconscionable, is likely to place undue influence or duress on the other party, the Court will usually set aside the agreement. To understand more, and seek clarity on your matter to create an Airtight Binding Financial Agreements please consider a Free 20-minute initial consultation with an experienced family lawyer in Brisbane. Article Source: Binding Financial Agreements
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Divorce property settlement examples: Wow I won Gold Lotto! What will I do with my $1M bucks?1/21/2021 Divorce property settlement examples
Hang on. If you are in a relationship, does your partner have an interest? Unfortunately, the winning may not all be yours. How would be the Family Court view on “Divorce property settlement examples” for a gold lotto prize? A windfall can either be a sizable inheritance or a lotto win. In the eyes of the Family Court, an inheritance is treated differently to a lotto win. The Family Court has great difficulty in distinguishing a lotto win by one party as a financial contribution by that party to the assets of the marriage. The Court assesses the financial contributions of the parties when determining the division of the net asset pool. In most cases, the Courts treat lotto wins as a joint contribution by both parties. That is, that if during the period of a relationship be it a marriage or de facto relationship, one party receives a sizable lotto win and that win is then applied towards the improvements or acquisition of matrimonial assets, the Court would deem that both parties have equally contributed to both the acquisition and improvement to those assets. Divorce property settlement examples from a gold lotto prize Hang on, I bought the winning ticket with my own money. Why should my partner have an interest if we separate? Let’s examine the case in question. A wife and husband maintained sole financial estates. They owned property in their respective names solely and operated their own bank accounts. The wife in that relationship purchased a lotto ticket and won a substantial prize. She argued that the lotto win came from her finances which were totally separate from that of her husband. Why would he have an interest after we separate? Court’s view on Divorce property settlement examples for a gold lotto prize The Court’s view was that because the ticket was purchased during the relationship it was a joint contribution. It was purchased from the incomes earned by the parties. It became a part of the assets pool and the normal principles for a division of the net matrimonial assets were applied on the basis that the lotto win was a joint contribution to that asset pool. What if the ticket was purchased shortly before the parties separated or after the separation but prior to the division of the assets of the relationship. It may be different if the parties are living separate lives or planning a separation. In those cases, the Court may consider that as a lotto win was obtained outside the relationship, the win could be deemed a sole contribution by the party who won the lotto prize-giving that party a greater interest in the net relationship assets or even to the extent of quarantining the winnings from the relationship assets and the party who purchased the ticket keeping the total value of the winnings. The Family Court when deciding a division of the net relationship assets looks at the financial contributions by the parties to the acquisition or improvement of the relationship assets and would take into account the respective value of the contributions made by the parties. Such contributions depend entirely on the facts of the case and the nature of and the extent of such financial contributions. The Court has a very wide discretionary power when considering such matters. The contributions by the parties, be they financial or otherwise, are assessed at the date of trial and not at the date of separation. If an agreement is reached between the parties prior to any litigation in the Court and prior to any trial then the value of the contributions would be the values on the date of any agreement entered into by the parties. The Family Court when considering financial contributions be they lotto wins or inheritances and the financial contributions attributed to such inheritances adopt in most cases a holistic approach to a division of the assets including any winnings or inheritances received. The essential task is to assess the nature, form, and extent of the financial contributions of all types made by each of the parties within their particular relationship.” Let’s look at the inheritances received by a party. Are they treated differently? A later receipt of an inheritance in a relationship is usually given more weight as a financial contribution by that party than if such inheritance was obtained earlier in the relationship. There have been many decisions by the Court where the inheritance was received shortly prior to or after separation. In such cases, the entirety of that contribution was given to the party who was in receipt of the inheritance, and the inheritance was effectively quarantined from the net relationship asset pool. The Court considered in one case that it was preferable to treat the inheritance as a separate asset. That is because the inheritance was received after the separation of the parties, and the wife, in that case, made no contributions, directly or indirectly financially or non – financially to the acquisition of the relationship assets, conservation of or improvement to such assets. In those circumstances, however, viewed, it is considered, the significance of the inheritance alternately turns on its impact as a financial resource of the husband pursuant to s75(2) of the Family Law Act. On appeal, the husband was successful in keeping his inheritance out of the net matrimonial pool. The above examples are cases where the inheritance was received shortly prior to separation or after separation. The relevance of s75(2) of the Family Law Act is the Court’s consideration of the future financial position of the parties. The inheritance is considered in these circumstances as providing a case where the husband had a resource that could be invested and provide a safe and secure future for him. Because of this the wife did not have that benefit and was given a slightly higher interest in the net matrimonial assets apart from the inheritance. The Hudson Institute says about Divorce property settlement examples for gold lotto wining I’m a member of a financial advising group, The Hudson Institute. I came across a recent article in the newsletter written by one of their financial advisers. It is interesting to note in this article, “there are some legendary stories of lotto winners squandering their winnings and ending up in a worst financial state (a common statistic is more than 75% of windfalls are squandered).” The article then goes on to provide some handy hints as to what a person should do if they do receive a windfall and provides some advice on the investment of the proceeds of that windfall. I have dealt with many cases where parties have squandered their winning or their inheritance. Many are left in a worse financial position than the position they were in prior to the receipt of the windfall. The windfall has led to heartbreak and tragedy, the relationship has broken down and the parties are left fighting over the assets that remain. It is heartbreaking to deal with such cases when in fact the parties if they had wisely invested their winnings or inheritances, could have lived a very comfortable life for the remainder of their relationship. I have also dealt with cases where the parties have wisely invested the winnings or inheritances but still could not maintain a relationship with each other. I do not know which is the sadder of the two. Be wise. Seek financial advice and legal advice in such circumstances. Find out more by contacting James Noble Law. Article Source: Divorce property settlement examples If the marriage separation process does occur. What should you do?
A marriage separation process has three elements;
If there are difficulties in your relationship look for a solution. It may be better to seek a resolution and seek advice to prevent a marriage separation occurring or to minimise the impact of a separation financially and emotionally if separation is inevitable. Seek advice. There are experienced family psychologists who can assist you with the *** emotions you are experiencing. Become aware of your own and your partner’s intentions and emotions. Seek advice from a counsellor to deal with your needs and your partner’s needs and the emotional hotspots you both may be experiencing. Counselling Endeavour to arrange joint counselling with your partner. If a counsellor cannot resolve your difficulties, counsellors may assist you to deal with your own **** or to assist you both with a respectful separation. Seek professional financial advice to structure your financial resources to minimise the impact of the marriage separation. Financial Issues Considerations that are necessary prior to the marriage separation process
Close all joint bank account as soon as possible and establish an account for yourself. Commence negotiations and try to resolve financial issues before the goodwill between yourself and your partner dries up. Work something out while communication is possible and don’t leave it before it comes too late. Leaving the family home Seek legal advice and counselling before leaving the home. If you intend to leave the family home make sure you take all items of property including personal belongings that you will require until a resolution has been obtained. It is important to take with you all financial documents or copies of such documents which will be required if financial and property issues cannot be resolved. Communication with your partner after a separation Maintain a diary noting all important events, phone calls and discussions regarding your financial and parenting issues and noting negotiations or decisions that you may achieve. It is important that you remain calm during all discussions with your partner. It is important to protect yourself against any domestic violence proceedings that your partner may bring against you. Endeavour to keep the lines of communication between yourself and your partner open, amicable and civil wherever possible. Remember that verbal agreements and written agreements relating to financial issues of property and your children are not enforceable if either you or your partner do not uphold the agreements which you have reached. Agreements can only be enforced by way of Consent Orders in the Family Court or by way of financial agreements in relation to financial matters. Important steps you should take if a marriage separation process occurs
Important Prior to taking the final step to separate from your relationship make sure that you obtain legal advice from a good Separation lawyer on the financial and emotional issues affecting both yourself, your partner and the children. Article Source: Marriage Separation Process Alternative dispute resolution (ADR) to Maintain a working relationship with your former partner after separation.
How to avoid court? Alternative dispute resolution. Maintain a working relationship with your former partner after separation, especially if there are children. For the sake of your family, especially your children, after a separation, it is important, if at all possible to do so, to maintain a working relationship with your former partner alternative dispute resolution. If only for a short period of time to help negotiate a resolution of financial and children’s issues. Seek a resolution of such issues that best suits your children, yourself, and your former partner. Importantly, try and avoid the emotional and financial stress of litigating these matters in the Family Court. If you require assistance to resolve such issues, there are many forms of alternative dispute resolution that DO NOT involve Court proceedings. Of the following celebrities, which ones used litigation to resolve their disputes, and which ones used alternative dispute resolution? Which ones were involved in vitriolic public slinging matches portrayed in the media worldwide which provided detailed information about their relationship.? Madonna, Uma Thurman, Robin Williams, Tiger Woods, Paul McCartney, and Ashley Cole. Madonna, Uma Thurman, and Robin Williams used alternative dispute resolution processes with very little, if any, information being provided publicly to the world. We all know about the public breakdown of the relationships between Paul McCartney and Heather Williams, Tiger Woods, and Ashley Cole who went down the litigation path. The lesson to be learned is that at all costs try to avoid a litigated resolution. There are numerous studies showing the substantial harm which can be inflicted on children in high conflict divorces when parents use the Courts as a means of addressing deep emotional pains that they have suffered as a result of their separation. The Courts do not have the power to remedy such emotional issues. The Courts, even with the best intentions, are not equipped to deal with the emotional issues resulting from a relationship breakdown. The Court’s function is based on an adversarial model. The Courts can only provide limited financial and psychological services that are required and which result from a relationship breakdown. Most litigants emerge from Family Court proceedings disillusioned with the Court process. Unhappy clients are commonplace in family law litigation. They are more likely to receive a decision that falls far short of a resolution which they had hoped for. Most matters in the Family Court are resolved prior to the decision being made by the judge. At some stage during the Family Court process, a resolution is achieved. Only 4% of matters proceed to Court for a judge to make a decision. 75% of such matters relating to children’s issues. Emotional and financial costs, which in most cases are irreversible, are often incurred in the lengthy preparation of the matter for a trial that precedes the eventual effort to settle. In many cases, agreements are hammered out virtually on the eve of the trial date through considerable pressure from lawyers and in some cases judges. Is there an alternative dispute resolution? Many alternative dispute resolution processes are available. Alternative dispute resolution is available to help parties resolve the relationship issues if they are unable to do so by themselves. Collaborative practice for Alternative dispute resolution Collaborative Practice has now established itself as a prominent means of resolving family law issues in Australia. Collaborative practitioners are governed by the International Academy of Collaborative Professionals (IACP). Members include family law practitioners, psychologists, consultants, financial planners and accountants, financial consultants, and communication professionals. The main distinguishing element of Collaborative Practice from other areas of family law practice is the binding collaborative agreement referred to as the ‘participation agreement’. Pursuant to the terms of this agreement, the collaborative professionals and their clients are prohibited from participating in contested court proceedings during the period of the collaborative negotiations. In Collaborative Practice, the desires and wishes of the parties participating in the negotiations are ascertained prior to the first combined meeting with their lawyers in the early stages of the joint negotiation meetings. It is quite common for parties to have the same wishes and goals, which are usually recorded on a whiteboard and which are visible throughout the negotiating process. The wishes and goals normally are:
The client in the first meeting will receive an education about the negotiating process involved in collaborative practice, which will empower the client to participate actively and effectively in the negotiations that will take place in the later joint meetings. Collaborative professionals assist their clients to achieve their highest intentions for themselves and their children in the post-divorce restricted family environment. Collaborative lawyers have an effective working relationship with each other. They work on a common basis to achieve the best results for their clients. Collaborative practice provides creative problem-solving that is not available or exists in mediation or litigation. The collaborative lawyers work together to assist the clients to reach a resolution that best meets the needs of the clients. All discussions, information sharing, option development, and negotiation take place in face-to-face meetings with the clients. The role of the collaborative professionals is to facilitate the negotiations and in the management of conflict. Collaborative professionals work effectively with their clients to offer the best possible circumstances in which to carry out negotiations in good faith in an interest-based respectful manner, to reach a mutually beneficial and accepted outcome. Family consultants and financial consultants can be involved in collaborative negotiation. The family consultants maintain a highly focused communication process during the negotiation process. They endeavor to reduce the stress levels during the meetings and assist the parties to clarify the issues involved. The family consultants have been trained in anger management skills which help the parties move as effectively as possible through the process. They provide balanced, non-judgmental, non-evaluative information about the children’s needs, with the aim of developing parenting plans for the children. They have a very comprehensive role in assisting the parties in reaching a resolution. The financial consultant assists the parties to clearly identify their property and financial issues, incomes, and expenses, and effectively document such matters for the collaborative lawyers to use in the negotiation process. They can assist the parties with any budgeting concerns. They assist in identifying the financial issues that need to be addressed. They assist in the settlement process by analyzing taxation issues and in projecting long term financial consequences of various settlement options that may be put forward during the negotiation process. The team approach of lawyers and consultants significantly reduces the costs of conducting the negotiations. The team approach streamlines negotiations and provides long-lasting ‘value-added’ resolutions. It enables the parties to negotiate educated resolutions of the issues involved. James Noble give a Brief on Australian Collaborative Law The team approach enables the parties to reach respectful, efficient, lasting, mutually workable solutions to financial and parenting issues. It assists the parties as parents to provide effective co-parenting of their children in the future. Mediation Overview of Mediation Mediation is a voluntary process, but the Family Court may order that you and your former partner participate in mediation, depending on your circumstances. Only you, your former partner and your lawyers, and the Mediator will be part of the Mediation process. Depending on the level of conflict and personal dynamics of the relationship between you and your former partner two Mediators may be necessary. The Mediator’s role is to assist communication between you and your former partner so that you can have open discussions and negotiate a settlement. Role of the Mediator The Mediator’s aim is to facilitate open communication between you and your partner so that you can:
The Mediator’s role is essentially a neutral one. The Mediator:
Characteristics of Mediation
1. Fact-finding and isolation of issues At this stage the Mediator will obtain as much relevant information as possible, identifying the issues to be discussed and identifying any underlying conflict which may be associated with such issues. The issues will deal with such matters as property, financial assistance, and children. Once the issues have been identified, the Mediator will then establish an agenda setting out the order in which the issues should be dealt with and the most appropriate way of dealing with such issues. 2. Creation of options and alternatives At this point, you and your partner will be looking at all the options and alternatives which could apply and which could be of assistance in resolving the issues which have been identified. By dealing with the options and alternatives, you will determine the most effective way of dealing with each issue. At this time, the Mediator will encourage you to be as creative as possible in setting up these options and alternatives. 3. Negotiation and decision-making at this point, you will be:
4. Clarification of agreements reached Hopefully, agreements will be reached on issues that have been isolated and discussed, and the Mediator will then prepare a written draft setting out your concerns, intentions, the facts agreed, and decisions that have been reached. The agreement can also deal with your future dealings and your relationship with your former partner. 5. Review of Process At this point, you can look at the matters that need to be made legally binding and determine the future review procedures required if any. 6. Implementation stage The agreement is made legally binding and the terms carried out. Overview of Collaborative Practice and Mediation Collaborative Practice and Mediation are both good alternatives to litigation when resolving disputes. Each of these methods has its own strengths, depending on the circumstances of the issue or dispute to be resolved. Your lawyer will assist you to assess whether either the Collaborative Practice or Mediation approaches are right for you. Deciding what’s most important to you Some people pursue litigation because they want to ‘win at all costs’, or for whatever reason the matter cannot resolve by negotiation or another process. Major disadvantages of Litigation By taking your matter to Court, you are likely to experience:
The efficiency of Collaborative Practice and Mediation Dispute resolution via Collaborative Practice or Mediation can be arranged in a timely manner and satisfactory outcomes can be reached relatively quickly. Collaborative Practice negotiations usually take place either over a number of two-hour sessions or in one session in mediation. Costs associated with Collaborative Practice and Mediation
Because Collaborative Practice and Mediation resolve matters speedily and amicably, the financial and emotional damage normally caused by Litigation will be avoided by you, your family, and your friends. Collaborative Practice will minimize conflict between you and your former partner. It will form a basis for your ongoing relationship with your former partner. Article Resource - Alternative Dispute Resolution (ARD ) in Australia. Financial Settlement for Home Loans, Properties, and Mortgages, After Divorce or Separation?1/8/2021 Financial Settlement After Divorce or Separation
What Happens to Financial settlement for my Home Loans, Mortgages, and Properties After Divorce or Separation? One of the biggest concerns of parties whose marriage has broken down is what happens to financial settlement resources and debt during this process. When it comes to matrimonial assets, one of the main considerations is whether the party who resides in the main property has the capacity to maintain the residence during interim and final proceedings.Whilst it is important that the matrimonial home is maintained during family law proceedings, it does not necessarily result in whoever lives in the home during this time to retain it. In the absence of a binding financial agreement (or prenuptial agreement) between the parties, the first and foremost process of finalizing financials will always be mediation. Sale of Property and Debt Importantly, if the matrimonial home is to be sold in the financial settlement, parties need to be aware of the terms of agreement of any Court Orders, the fees and expenses associated and incurred in the sale process as well as taxation implications. Debts should be similarly assessed to matrimonial assets, to ensure future fees and demanded payments can be met by both parties. Depending on the size of the asset pool and the property which is to be sold, Capital Gains Tax (CGT) can be significant, in addition to stamp duty if a property is being transferred to the other party. It is recommended to seek family law advice both from a family law specialist and financial accountant on your position in relation to the dissolution of matrimonial assets in the financial settlement. Article Source – Financial Settlement issues |
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