Protection of Property and Income from further claims following Property Settlement

05/02/2015

Mark approached Watson & Watson Solicitors following the breakdown of his marriage with Gail.  Mark and Gail had agreed to allocation and distribution of the matrimonial property.  Mark was concerned that once the settlement had been effected that he protect himself from further claims. 

Dennis Grant of Watson & Watson Solicitors considered the fairness of the informal arrangement agreed between Mark and Gail and it fell within the appropriate range for an allocation of property between Mark and Gail.  The difficult issue was preparing the most appropriate documentation to give effect to Mark’s desired outcome that there be no further claims following the family law property settlement.  All cases are different and the documentation that is appropriate will depend upon the factual circumstances surrounding the parties.  The factual circumstances can be wide and varied and will have a very significant bearing on the format of the documentation of any settlement.

Mark and Gail lived together for 5 years before they married in 2000.  There are two children of the marriage.  Mark works full-time in an executive position for a large Bank.  Mark financially supported Gail and the children throughout the marriage.  Gail looked after the children.  Gail returned to work when the youngest child started High School.  Gail has a clerical job in the same bank as Mark.  The children are now 19 and 15.

Gail and Mark had decided to divorce and to divide their property.  Mark recognised that Gail did not earn as much as he and will find re-establishing herself more difficult.  They have agreed that Gail will keep the house and that Mark will purchase a unit.  It has also been agreed that Mark will give some of his superannuation to Gail as she does not have much superannuation because she has been out of the work force for some time. 

Mark is very well paid and it is expected that his salary will continue to rise.  Gail has a good job however it is not a position where it is expected that Gail’s income will rise greatly.  It is unlikely that Gail will ever earn as much as Mark.

Gail and Mark are both only children and each has one parent living.  Both expect to obtain any inheritance when their parent dies.  Mark’s father is not well and Mark is worried that his father may die in the near future and that he will receive an inheritance.  He is concerned that Gail may want a share in his inheritance.

Mark consulted Dennis Grant of Watson & Watson Family Lawyers Sydney to advise to as to how to structure the settlement so as to minimise the risk of Gail coming back to make a claim on his inheritance or coming back and asking for more money. 

Dennis Grant considered the matter and advised that there were considerable risks associated with inappropriate documentation of the agreement.  The Family Court is not bound by an agreement where the documentation of the agreement is not in accordance with the appropriate laws. 

Dennis Grant’s main concern was the possibility of Gail seeking and obtaining further spousal maintenance even though the parties had “agreed” that there be no further claims.  Similarly, Mark was concerned that Gail could make a claim on Mark’s estate even though she had told Mark that would not happen.  These are issues that are considered by Watson & Watson in all matters whether the client has considered those matters or not.  Mostly the client has not considered the many myriad factual matters and possible claims as a result of the marriage coming to an end.

In this particular case documentation of the agreement was prepared by Dennis Grant of Watson & Watson Solicitors and provided Mark with the best protection available through:

  1. Application for Consent Orders and Consent Orders to be approved by the Family Court of Australia. The Orders set out who gets what.  As in this case Gail was to obtain the matrimonial home, there is no stamp duty payable on the Transfer of the house to her.
  2. Deed of Release - Succession Act 2006 NSW – this is to prevent either Mark or Gail from making a claim on the estate of the other when the other dies.
  3. Binding Financial Agreement – this deals with release of possible spousal maintenance claim by either Mark or Gail.  This is particularly important in this case having regard to the factual matrix. 

Watson & Watson Solicitors also advised of other possible protections for the family such as appropriate income protection, term life insurance and other matters that could be appropriate in the circumstances.

Dennis Grant prepared the settlement documents.  Gail was represented by her own lawyers.  The matters are resolved and the Family Court of Australia made the Orders by consent without any need for any party to attend Court.

The best protection has been provided for Mark in the documentation of the settlement.

If we had been asked to act for Gail we would not have recommended or encouraged a similar structure for documentation of the property settlement.

You should consult experienced Sydney Family Lawyers such as Dennis Grant or Richard Watson to ensure proper structure and documentation of all settlements.  It is also important to remember that circumstances may change in the future, these need to be considered as part of the documentation of any resolved issues.

The settlement achieved for Mark, a better outcome (risk adverse as to future claims) than would ever be available in a litigated matter. 

If you are concerned as to the appropriateness of the documentation of any settlement, please contact Richard Watson or Dennis Grant, Senior Family Law Solicitor with a wealth of experience or Richard Watson’s Personal Assistant, Shereen Da Gloria to see whether we can assist you. 

The inappropriate documentation will not achieve the desired outcome.

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