(03) 9720 2922

Jansen Walsh & Grace

 


Family Law

Common issues in Family Law are:

  • Children
  • Property
  • Intervention orders


Children

If you and your spouse or partner have children and you cannot agree on parenting or financial support, you may need:

  • a parenting agreement;
  • an applications to the Family Court or the Federal Circuit Court for parenting orders
  • child maintenance


Photo Vasilis Ververidis Dreamstime.com

Property

Angelina Jolie and Brad Pitt are currently still working through their property settlement.  If you and your spouse or partner have property (just maybe not a French chateau) and you cannot agree on property and financial matters, you may need:

  • a binding financial agreements
  • an application to the Family Court or the Federal Circuit Court for property orders.


Different kinds of property agreements with your spouse

You can have a financial agreement:

  • with your future spouse prior to your marriage (often called a "pre-nuptial agreement”);
  • with your spouse during your marriage;
  • with your spouse following your separation.




Different kinds of property agreements with your partner

You can have a financial agreement:

  • with your future partner before entering into your relationship;
  • with your partner during your relationship;
  • with your partner after the ending of relationship.




Transferring your property

If you have purchased a property with your spouse or partner and the relationship has broken down, you may wish to sell it or to have the property transferred into your sole name.  This is known as a transfer of equity.  At Jansen Walsh & Grace, we will deal with the drafting of the Transfer of Land and the terms of the underlying agreement, including whether you need a court order.  What's more, we will make the process as smooth as possible.  We appreciate that this is a stressful time for you, and we will handle your transfer with care and understanding. 


“Do I have to pay stamp duty?”

There is no land transfer duty on the transfer of your principal place of residence.


There is no land transfer duty on the transfer of your investment or rental property if the transfer is a result of a breakdown of the relationship.


“Am I liable for any capital gain?”

There is no CGT on the transfer of your principal place of residence.


However, the transfer of your investment or rental property will trigger CGT unless:

  • you have a binding financial agreement
  • you have property orders from the Family Court or the Federal Circuit Court.




"How do I avoid capital gains tax on the transfer of my investment or rental property?"

However, transfers of investment and rental properties are subject to capital gains tax.  If you and your spouse or partner divide your investment or rental property under a private or informal agreement (not because of a court order, a binding financial agreement, an arbitral award or another agreement or award referred to above), the marriage or relationship breakdown rollover does not apply.  If this is the case, you must take any capital gain or capital loss you make on the transfer of the asset into account in working out your net capital gain (or net capital losses carried forward to future years) on your tax return for that income year.

 

Spouses and partners often forget that transfers between themselves of investment or rental properties are subject to capital gains tax.  This is based on the market value of property less the cost base. 

 

This is because rental properties, investment properties and commercial properties are subject to CGT on the transfer regardless of the fact that the parties are spouses or partners.


The spouse to whom the asset is transferred is taken to have acquired the asset at the time of transfer.

 

Special rules may apply if a spouse receiving property does not pay anything for it, or if the amount paid by one spouse for property owned by the other is greater or less than the market value of the property and they are not dealing at arm’s length.  In these cases, the transferee is taken to have paid the market value of the property and the transferor is taken to have received the market value of the property.   You are said to be dealing at arm’s length with someone if each of you acts independently and neither of you exercises influence or control over the other in connection with the transaction. It depends not only on the nature of your relationship but also the quality of the bargaining between you.

 

If you wish to access the CGT exemption for a breakdown, you must have a binding financial agreement or a court order.  Some couples separate and have a DIY agreement to transfer their investment or rental properties.  Of course, this saves on legal fees!  However, the transferring party may be hit with a CGT tax liability which they have to pay.  In most circumstances, where the parties are in agreement, a lawyer's fees are much less than the CGT liability.


“I don’t need a binding financial agreement”

Stan and his partner ended their relationship and separated.  As neither had much in the way of assets, they did not make a binding financial agreement or seek financial orders.  After they separated, Stan’s mother died.  Stan inherited one of her houses in Albion.  Stan made a will.  The beneficiaries of his will were his son and his brother.  Not surprisingly, his former partner was not a beneficiary.  Stan died.  The principal asset of his estate was the house in Albion he had inherited from his mother.  His partner made a claim on his estate.  The trial judge awarded her 80% of Stan’s estate and her legal costs.   The executor’s lawyers argued on appeal that Stan had inherited the house in Albion from his mother after the relationship had ended.  On 8  September 2020 the Court of Appeal dismissed the appeal.  This could have been avoided if Stan had made a binding financial agreement or sought financial orders.




Warning about predators

Once you have made an application to the Court, you may be approched by a person offering "to help" you by buying your property.  These shady people prey on the vulnerable where there is a breakdown.



Photo 174408005 © Featureflash | Dreamstime.com


“Can I get a pre-nup?”

Yes.  Kim Kardashian and Kanye West have a pre-nup.  We can provide you with one.

“What is a pre-nup?”

A pre-nup or pre-nuptial agreement is a binding financial agreement under the Family Law Act.  It deals with what happens to the couple’s property and financial assets in the event that there is a breakdown in a marriage or the relationship ends.  It is signed by the couple before they marry or become partners.  This is what Kim Kardashian and Kanye West have done.


It could also be signed during the marriage or the relationship.


“Does a pre-nup only apply to married couples?”

No.  It can also be used by couples who are intending to become partners or are already partners.


“Is a pre-nup binding?”

It is binding if it satisfies the provisions of the Family Law Act.  There are three aspects to this.


First, a pre-nup is not binding unless each party receives independent legal advice before signing.


Secondly, a pre-nup may not binding if one of the couple conceals some of their financial assets. 


Finally, the High Court in Thorne v Kennedy has held that it is not binding if it is unfair.  That case involved a wealthy property developer and his ex-wife.  The couple had met online in 2006. At the time, his future wife was 36 years and had no substantial assets. The property developer was 67 years and had assets of up to $24 million.  The property developer took her to a lawyer to sign a pre-nup.  He told her that if she did not sign the agreement, then the wedding would not go ahead.  She signed the agreement and the wedding went ahead.  The couple separated.  The High Court described the lump sum payment based on the terms of the pre-nup as a “piteously small.”


“Do we each need to see a lawyer before each of us signs it?”

Yes.




Property: don’t forget your horse

This firm was featured on page 45 of June/July 2018 issue of Hoofbeats magazine: 'Divorce, but what happens to your horses?'  We look at what Johnny Depp and Amber Heard did about their horse when they divorced and what the Family Court has said their horses in disputes between separating spouses and partners.






The Federal Circuit and Family Court have been merged by the Federal Circuit and Family Court of Australia Bill passed on 17 February 2021.  Both courts have been merged.  The merger will come into effect on the date to be fixed by Proclamation.


What we do

  • Binding financial agreements
  • Parenting agreements
  • Applications to the Federal Circuit Court for property orders
  • Applications to the Federal Circuit Court for parenting orders
  • Intervention orders

 



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