Is this what you think? Then you would be WRONG.
When a married or de facto* couple separate, the question usually arises: “Who gets what?” Whether a couple has been together for 2 years or 22 years, a division of the property of the relationship will likely be relevant.
Regrettably, it is not uncommon for parties facing a property settlement with their ex spouse, to seek to minimise the value attributed to an asset in their name or in some circumstances hide the existence of an asset altogether. Such actions are unhelpful and run contrary to the obligations placed on all litigants before the Family Law Courts to make full and frank disclosure of all relevant financial circumstances pertaining to their situation.
So what is relevant property anyway? When a court is deciding a property settlement pursuant to the Family Law Act, it will take into account any interest in an asset that either spouse party has, irrespective of whether such asset is wholly owned in the name of that party or not.
Relevant assets considered by the court when determining the pool of assets available for distribution between spouses include but not limited to real estate; superannuation; businesses; entities such as companies or trusts and the respective assets owned by such entities; financial assets such as bonds, stocks and shares, cash; vehicles, boats and caravans; artwork and collectables; jewellery; and furniture and effects. Relevantly, interests in such assets are not limited to ownership in Australia. Internationally owned assets are also relevant. Effectively, anything that can be valued and traded on a market would be classified as property and included in the ‘pool’ of property available for distribution.
A spouse party may have an interest in an asset with others. For example, a factory might be owned by 4 siblings in equal shares where the first sibling is a spouse party to a property settlement. In such circumstances, the spouse party’s ¼ share in that factory will likely be included in the property pool.
A twist on the same example – the factory might be owned by a company of which the 4 siblings are all directors and equal shareholders. Again, the spouse party’s shareholding in that company, which will include the value of the factory, will likely be included in the property pool.
And one step further removed – let’s imagine that the factory is owned by a discretionary trust which has a corporate trustee and nominates a range of discretionary beneficiaries in the trust deed. The spouse party is not a director or shareholder of the corporate trustee but is a listed beneficiary together with the other 3 siblings. The interest in the factory might get a little harder to define, however, the Family Law Courts have the power to make declarations that the spouse party has a quantifiable interest in the factory owned by the trust if, after a detailed forensic accounting investigation into trust has been conducted, the court is satisfied that such a declaration ought be made. In such circumstances, the interest declared to be owned by the spouse party will likely be included in the calculation of the property pool.
Once an asset has been determined for inclusion in the property pool, then it’s market value must be determined either by agreement or by obtaining a valuation report from a registered valuer or forensic accountant.
So the bottom line is, if you have an interest in an asset directly or indirectly, in Australia or outside Australia, then chances are that it will be relevant in the context of a property settlement and will therefore be subject to the obligation to make full and frank disclosure conferred upon all litigants in the Family Law Courts.