Assets in the Hands of Third Parties – Be Aware

11/01/2017

Usually in family law matters and de facto property division matters there are two people (for example the husband and the wife) who are parties to the dispute.

Those two parties’ dispute involves the division between them of the assets and liabilities held by them.

Often there is no dispute as to the extent of the assets or the liabilities.  However that is not always the case.

As part of the initial process there is a requirement for full financial disclosure of each party’s assets and liabilities.  This is dealt with in other articles.

At the early stage of the disclosure process it may become clear that one party may dispute the extent of the assets or the extent of the liabilities of one or other of the parties.

One needs to look at both parties and the extent of each of their assets and liabilities so as to be able to ascertain what are the assets and liabilities and accordingly the net assets of both parties combined.

Another issue that arises is the valuation of those particular assets and liabilities.

In some cases it becomes apparent that:

1.        An asset although held in the name of a third party such as a trust, parent or sibling is in truth beneficially owned by one or other or both of the parties to the relationship.

2.        There may be a dispute as to whether there is money owed by one of the parties to the relationship to a third party such as a parent, sibling or related company.  It often arises as to whether an advance of money or property by a parent of one of the parties is by way of a gift or a loan with an obligation to repay the loan.

3.        There are assets held in a trust.  We deal with this in a separate article.

4.        There may be circumstances that have arisen either during the relationship or following the relationship where one party has entered into or released a third party which is not on a bona fide basis.  One example may be the sale of an asset for example in the husband’s name to a family member for an under value.

5.        Another example is where the parties to the relationship have expended money in building for example their home on land which is not owned by either of the parties.  One example that often arises is where a residence is built by the parties to the relationship for example on the land owned by another.

Each of the above examples (and many other circumstances) gives rise to a possible adjustment of the value of the net pool of assets to be considered.

Careful consideration needs to be given as to how to manage the obtaining of proper accounting and the determination of the true assets and liabilities position.  This is more so if there is a deliberate attempt by one party or another to either have assets that would otherwise be accountable excluded from the asset pool or to increase the liabilities which would otherwise not be appropriate liabilities.

One needs the care, consideration and expertise of the experienced family law and commercial Lawyers at Watson & Watson.

One of the difficulties arises when there is a “cosy” arrangement between the parties to a marriage or defacto relationship (or one of them) for example the husband and the husband’s parents or the wife and the wife’s parents.

One should not take or accept the opinion of for example the husband and the husband’s family as being absolutely unassailable.  Careful investigation on a cost efficient manner needs to be had in this regard.

There are many ways of considering and obtaining the necessary information so that the Family Court is aware of the position to truly understand the case and the true position of the assets and liabilities of the relationship.

It may be necessary that action is taken on either an urgent or non-urgent basis to protect the disposition of assets by one party or another.

At Watson & Watson we have had extensive experience in relation to and assisting parties in connection with the most difficult and possibly often blatant tactics of one party or another to avoid putting their true position forward.

Our experienced Solicitors will give consideration as to what action should be taken either on an urgent or interim basis and advise in relation to the risks associated with either taking action or not taking action.  There needs to be a consideration of the cost and benefit.

There are other matters that arise for example whether there should be an Application to transfer for example property held jointly by the husband and the wife to have that tenancy severed so that the property thereafter is held as tenants in common.  There are careful considerations required in relation various aspects of the matter.

At Watson & Watson we will provide to you sound advice based on our extensive experience so that you are in a position to fully understand the issues that arise and make informed decisions on a cost effective basis.  If you are faced with the dilemma of financial/property settlement with assets held by third parties, please do not hesitate to contact Richard Watson or his assistant Shereen Da Gloria on 9221 6011 for assistance.

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