Transferring Property without Legal Advice
When couples mutually decide to separate, they also often try to divide their assets and liabilities without seeking legal advice regarding their future vulnerabilities such as the tax implications resulting from their financial settlement.
In the end, failing to obtain legal advice can be an extremely costly exercise particularly if the property settlement involves the transfer of real property.
In Western Australia, the transfer of real property generally incurs stamp duty, paid by the person receiving the property. For example, if a couple have decided to transfer their home valued at $1,000,000 from joint names to the name of one spouse the spouse receiving the property will have to pay stamp duty of approximately $20,000, a significant cost at the best of times let alone at separation.
A formal agreement prepared in accordance with the Family Law Act or the Family Court Act and stamped by the Family Court will alleviate the requirement to pay stamp duty on the transfer from one spouse to another. In the example above, the couple would save $20,000.
The relatively small cost of engaging a family law practitioner to produce a formal property agreement upon separation is a quick and safe way to ensure that your property settlement is formalised and cost effective.