People are often confused about what assets and liabilities are taken into account by the Family Court when it comes to working out a property settlement following the breakdown of a marriage or de facto relationship. It is common for parties to hold assets in the names of other entities, and assume that those assets are protected from potential Family Court claims.
The short answer is – everything is in!
The Family Court will look behind the veil of businesses, Family Trusts or other entities to determine who the true owner of every asset is. This means that, if you effectively control a trust or business, then you are more than likely going to be found to be entitled to the assets held by that trust.
This can work for or against you depending on your personal circumstances, however the reality is that a fair property settlement should take into account both parties’ true financial position.
If parties are trying to find a way to protect their assets from a potential Family Court claim, then they should obtain advice about entering into a Binding Financial Agreement. A Binding Financial Agreement is Australia’s answer to a pre-nup.
For more information about these matters, contact one of our Family Lawyers today.