Significant Assets - Long Marriage; Achieving Early Resolution of Property Settlement Agreement

19/10/2015

Watson & Watson received instructions from Ralph after his marriage had broken down.  The husband and wife had been married for many years and had 3 children, 2 of whom had left school and were adults.  The assets consisted of the family home, a business owned by the husband, wife and extended family and numerous property holdings including the land from which the business operated and various home units mainly relatively low value home units throughout Sydney.

 

Each of the parties agreed in principle that they were looking for a fair resolution for a settlement agreement including property settlement agreement.

Richard Watson a Family lawyer Sydney in the initial conference with Ralph explained the process of financial disclosure, the Family Court procedures, the matters taken into consideration by the Family Court in providing a decision if the matter could not be resolved.  There were discussions as to the likely range of outcomes.  Initially this was on a net percentage basis having regard to the uncertainty as to the value of the family business.  As in many cases where there is a family business its valuation is likely to be contentious. 

There were considerations as to who would operate the business and how it would operate following separation as well as the usual valuation issues.  Richard Watson explained to Ralph the Family Court process as to valuation by way of experts (usually a Court appointed single expert) if agreement could not be reached.  It is clear the greater the variables and the unknown variables the higher the risk of a valuation by a Court appointed single expert which may be outside the true range of valuation and may be detrimental to one of the parties if not both of the parties. 

The wife instructed an experienced family lawyer who was able to see the benefit of an early negotiated resolution without the need to value each and every asset or even each asset in which there was dispute as to its value. 

Full financial disclosure was provided and liberal access of the records to the business were available to arrange an estimated range of valuers on a non-binding basis.

It became apparent that there was a range of valuations which depended on the future intentions and operation of the business and the question as to whether the business should be valued on the basis of the ongoing business or an asset realisation basis.

The parties with the help of their family law solicitors looking for a reasonable resolution within the range agreed the range of the value of the business and the alternatives having regard to the likely position taken by each of the parties following separation as to the operation of the business.

In addition, it was apparent that based on all other issues that the variation in the range of total net value of the assets was about 15% of the net asset value.

It was apparent that that the assets would be distributed depending on the valuation and each of the parties would be allocated between 45% and 55% of the net value of the assets if there was a contested hearing and a decision by the Family Law Court.

In this case there were numerous difficulties and probably in some ways more difficulties than in most cases. 

With the goodwill of the family law lawyers an outcome was achieved acceptable to both parties.  One of the benefits in this particular case was that the family home was a relatively modest family home and as such the wife and mother of the children were able to remain in the family home. 

The savings were considerable and there was no need for a formal or contested valuation of the assets in particular, for the business which would have been highly contentious and if valued by a single expert may have been less accurate than the final resolution. 

Often the breakthrough does not come at an early stage and the benefit of an early settlement is lost to a degree as the legal costs, the valuation costs, the disruption to the business and the disruption to the relationship often is greater than the difference between the best and worst case scenario for either the husband or the wife. 

Similarly, often there are unrealistic expectations often by each party as to the outcomes of entitlement to a property settlement and often the family law lawyers do not explain the realistic outcome in light of the simple proposition that there is a range of outcomes which experienced family law lawyers can estimate and advise at a very early stage.  Of course, on some occasions the advice can be dependent upon such things as what a valuer or an expert may value the business (or other asset).  One difficulty is the timing of the formal valuation required for the Court hearing which may be after very considerable expenses have been incurred by each party, husband and wife.  As one example of what can go wrong we refer you to our further article “Property Settlement - True Value” dated 4 June 2013. 

If you are embroiled in a case which does not seem to be achieving anything other than running up Court costs for each of the parties and other emotional draining matters we suggest that you seek a second opinion.  The second opinion could be by asking your lawyer for Counsel’s opinion at an early stage.  Normally the opinion is qualified or dependent upon the outcomes of what might or might not happen in the proceedings.  One thing is for certain is that your costs will continue to escalate until either resolution or a determination by the Court. 

Alternatively, you could contact Richard Watson and let the experienced family law lawyersat Watson & Watson advise you as to the alternatives and options that are available.  The options may include taking decisive action initially with a plan to achieve the outcome that is appropriate in your circumstance.

As we have indicated elsewhere, in the article 9 July 2015, marked “Offers of Settlement under utalised – Almost never too early to make an offer” in our view, the making of offers at an early stage is underutilised.  The offer can be framed in many different forms looking at for example, overcoming what is seen to be a roadblock from resolution. 

Watson & Watson have acted in many matters with signigificant assets of diverse  nature and most cases are resolved after proper consideration of the assets and liabilities and the costs and risks associated with proceeding with the matter and having it finally determined by the Court. 

One of the important issues in your legal representation is to ascertain what percentage cases are settled but more importantly at what stage of the process are they settled.  Property settlement agreements are more beneficial to you if settlement is reached at an early stage rather than just before the case is to be heard.  Proper early consideration of the appropriate resolution and taking decisive action to attempt to resolve the matter will be of great benefit to you. 

Please do not hesitate to contact Richard Watson an experienced family lawyer if you wish to discuss any matter concerning the resolution of your financial position or property settlement agreement.

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