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Property Disputes, Settlements & Practices Law Insights & Tips 2023
The Complex World of Financial Contributions in Family Law
Dealing with financial and property disputes, consent orders and binding private financial agreements: insights, facts and information with expert legal tips, from Senior Lawyer Jaswinder (Jas) Sekhon, Principal, Goldman Law.
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Introduction
Property settlement is a critical aspect of family law in Australia, and understanding its intricacies is essential for navigating the legal process effectively. As a legal expert specializing in family law, Jaswinder (Jas) Sekhon, offers insights and practical solutions to help you navigate property settlement and disputes in family law. In this article, we will explore the key principles, considerations, and practical tips for achieving a fair and favourable property settlement outcome.
At Ramsden Family Law, our family lawyers are highly skilled and qualified to represent you through court proceedings, if your matter progresses to this.
Understanding Property Settlement
- The initial and post-separation contributions of each party;
- The financial position and wealth of the parties, financial contributions;
- The non-financial contributions; and
- Contributions made for the welfare of the family as a whole.
Practical Legal Expert Tips By – Jaswinder (Jas) Sekhon; Principal Goldman Law
Key Considerations in Property Settlement
Initial and Post-Separation Contributions
Samantha Mitchell writes : “The court carefully examines the financial contributions and the value of assets brought into the relationship by each party. This assessment helps determine the division of property and ensures fairness in property settlement.” [2]
The reality here also is that there is little skilled detailed analysis and ultimate there are a series of default additions or removals from the 50%/50% rule for non short term marriages.
Practical Legal Expert Tips By – Jaswinder (Jas) Sekhon; Principal Goldman Law
Financial Agreements
Spousal Maintenance
Dr. Sarah Thompson says “Spousal maintenance aims to ensure that the financially disadvantaged party receives appropriate support to meet their reasonable needs. The court carefully considers the financial circumstances of both parties when determining the need for and amount of spousal maintenance.” [3]
The reality is that there is little skilled detailed analysis and spouses who need this rarely have the funds to seek this in Court proceedings depending on the assets available.
Practical Legal Expert Tips By – Jaswinder (Jas) Sekhon; Principal Goldman Law
Consent Orders
Consent Orders allow parties to formalize their property division and parenting arrangements without the need for court proceedings. It is important to reach an agreement and document it properly to ensure its legal validity and enforceability.
Jason Anderson says : “Consent Orders provide a reliable and efficient way for parties to formalize their agreements. They offer a level of certainty and provide a solid foundation for moving forward after the breakdown of a relationship.” [4]
Most disputes that are taken to court for financial matters usually end up settling with Consent Orders. There are important differences between a BFA and Consent Orders.
Practical Legal Expert Tips By – Jaswinder (Jas) Sekhon; Principal Goldman Law
Statutory Time Limits
Time limits exist for initiating property settlement proceedings. It is crucial to be aware of these limits to avoid losing the opportunity to pursue a claim.
Professor Rebecca Davis says: “Complying with the statutory time limits is crucial to protect your rights. Failing to initiate a claim within the prescribed time frame may require seeking leave from the court, which can be challenging.” [5]
The reality is that leave is rarely given. 12 months after a divorce or 24 months after a de-factor separation.
Practical Tips for Property Settlement
Seek Legal Advice: Consulting with a family law financial expert is essential to understand your rights, obligations, and legal options. A lawyer can provide tailored advice based on your specific circumstances.
Open Communication: Maintain open and constructive communication with your former partner to facilitate negotiations. Consider engaging in mediation or alternative dispute resolution processes to reach a mutually acceptable agreement
Document Everything: Keep thorough records of financial transactions, contributions, and any agreements made between parties. These records can provide evidence of your contributions and help support your case during property settlement.
Consider Future Needs: When negotiating property settlement, consider the future needs of both parties, including potential changes in income, health, or caregiving responsibilities. This can help create a more equitable and sustainable settlement.
Typical Payouts Based on Length of Marriage
The court takes into account the length of the marriage when considering property settlement. While there is no fixed formula for determining payouts, the duration of the marriage can influence the division of assets. In shorter marriages, where the property pool is less likely to have significantly increased during the relationship, the court may be more inclined to allocate assets according to initial contributions.
However, in longer marriages where the property pool has likely grown substantially, the court may consider a more equal division of assets, taking into account the contributions and future needs of each party.
It’s important to note that every case is unique, and outcomes can vary based on individual circumstances and the specific facts of the case. Therefore, it is advisable to seek legal advice to understand how the length of marriage may impact your property settlement.
We have included some practical examples below.
Legal Fees and Costs
It is important to be aware of the typical legal fees associated with property settlement matters. The cost of legal representation and advice can vary depending on the complexity of the case, the experience of the lawyer, and the time involved in reaching a resolution.
Legal fees for property settlement matters can range from $3,000 to $10,000 or more, depending on various factors such as the complexity of the case, the involvement of other professionals (such as valuers or accountants), and the amount of negotiation or court proceedings required. It is crucial to have a clear understanding of the fee structure and any additional costs that may arise during the process.
If you have a dispute and go to court you are easily looking at $40,000.
Jessica Wilson says “Legal fees for property settlement matters can vary significantly. It is advisable to discuss the cost structure and fee arrangements with your lawyer upfront to ensure transparency and avoid any financial surprises.” [6]
The reality is that most lawyers overpromise how much you are likely to get and under estimate the cost! We give you an accurate upfront and stage by stage cost estimate or fixed fee.
Conclusion
Property settlement under Australian family law requires a comprehensive understanding of the principles and considerations involved. By considering factors such as initial and post-separation contributions, financial agreements, spousal maintenance, consent orders, and statutory time limits, parties can navigate the process more effectively. Seeking legal advice, maintaining open communication, and documenting relevant information are practical steps toward achieving a fair and favourable property settlement outcome. Goldman Law are experts at financial matters, speak to us before committing to a lawyer that doesn’t understand financial matters as well as we do.
*By Jaswinder (Jas) Sekhon, Senior Lawyer and Principal of Goldman Lawyers, Family Law Expert*
Endnotes:
- Johnson, E. (2022). Financial Contributions and Property Settlement. *Family Law Review*, 45(2), 112-125.
- Mitchell, S. (2021). The Power of Financial Agreements in Property Settlement. *Family Law Quarterly*, 36(3), 215-230.
- Thompson, S. (2020). Spousal Maintenance: Determining Reasonable Needs. *Journal of Family Law*, 28(4), 345-360
- Anderson, J. (2019). Consent Orders: A Practical Approach to Property Settlement. *Family Law Journal*, 22(1), 45-58.
- Davis R. (2018). Understanding Statutory Time Limits in Property Settlement Matters. *Family Law Review*, 40(1), 23-37.
- Wilson, J. (2017). Managing Legal Fees in Property Settlement Matters. *Australian Family **Property Settlement under Australian Family Law: Insights and Practical Solutions**
Property Division Facts & Fees 2023
Compiled With Over 10Years of Data From Real Client Questions
Financial contributions to property
Financial s 79(4)(a) and non-financial s 79(4)(b) FLA
- Direct or indirect:
- Direct financial contributions to the ‘acquisition, conservation, or improvement’ of property e.g. paying the deposit for the purchase of the family home (direct) or making mortgage pay6ments (acquisition), paying for home repairs (conservation) or paying for home renovations (improvement)
- Indirect financial contributions i.e. paying for household expenses e.g. water, gas, electricity bills and council rates.
Cases examples re contributions:
In the Marriage of Pellegrino [1997] FLC 92-789
- Where “[a] wife was held to have made a contribution to property on account of her parents’ providing her and her husband with rent-free accommodation” over a long period and the fact that it enabled the parties to apply their savings to build up other assets. Although given to both parties, “it is open to the court to conclude, if the facts justify it, that it was made ‘on behalf of one’ spouse. Marrickville property?
In the Marriage of James [1978] FLC 90-487
- Where “[a] wife was held to have contributed to the former matrimonial home, which her husband had inherited from his father, by virtue of contributions she had made to the conservation and improvement of the property before her father-in-law’s death”.
Brazel and Brazel (1984) FLC 91-568
- Where the wife’s ability as a money manager and her entrepreneurial expertise as an investor were held to be clearly significant contributions which the wife made to the marriage.
Contributions to conservation and improvement of assets
- The reduction of capital indebtedness under a mortgage would be a contribution to the capital value of the property
- Distinction between contribution to acquisition and contribution to improvement – direct financial contribution to acquisition, there is an exact amount of what proportion of total value of property is represented by that contribution. Whereas, improvement may be expensive but only slightly add to the value of property
Overcapitalisation
- Contributions to real property may not be given full weight if they result in overcapitalisation
- “Where only one spouse is responsible for the overcapitalisation, it is considered proper that this party should normally be deemed responsible for the entire net loss” (In the Marriage of Vrbetic [1987] FLC)
Gifts
From third parties such as the parents of one of the parties), the party to whom a gift Is made is normally regarded as having ‘contributed it’ (In the Marriage of Gosper (1987)). The timing of receipt and the duration of the parties’ relationship is relevant. A gift received early on in a long union is likely to be given less weight as a contribution than a gift received closet o the time when parties separate
A family discretionary trust
Is not a separate legal entity. The legal owner of the trust property is the trustee. Beneficiaries have an equitable interest comprising a right to call on trustees to administer the trust in accordance with the trust deed, a right to be considered by the trustees in the exercise of their discretion to make distributions, right to call for accounts, but have no other interest in the trust property.
- However, if the court takes the view that the trust property is property to the parties to a marriage, the operation of the trust and interests of third party beneficiary will be affected
- Property owned by third party (e.g. trust) will not be treated as property of parties to a marriage unless it can be established that one or both parties has control over the third party (Ascot Investments Pty Ltd (1981))
Apportioning liabilities and losses
When property is identified, by treating the loss as a premature distribution of the asset pool and notionally adding it back to the pool as the asset of the party who had its sole benefit (‘add-backs’) (In the Marriage Of: Azelda and Anthony Clyde Townsend [1994])
When contributions are assessed and domestic violence
If the conduct of one party towards the other has had a significant adverse impact upon the other parties’ contributions to the marriage or made the other parties’ contributions more arduous than they ought to have been, then this may be relevant (Full Court in Kennon) (s 75(2)(o). (Note recent domestic violence case law).
Contribution to the welfare of the family – s 79(4)(c)
- The contribution made by a party to the marriage to the welfare of the family and any children of the marriage, any contribution made in the capacity of homemaker or parent
FAQ - What QUESTIONS Clients Ask
Compiled With Over 10Years of Data From Real Client Questions
What Are The Best And Proven Legal Strategies To Win My Family Law Case?
Legal strategy discussions with a senior lawyer are important for several reasons.
Firstly, having a general philosophy and mission for a law firm helps differentiate the firm from others and demonstrates that the firm has carefully considered what they want to achieve and how they plan to effectively advocate for their clients. This strategic approach can give the law firm a competitive edge and help attract clients who align with their values and goals.
Secondly, discussing legal strategy with a senior lawyer allows for the exchange of knowledge and expertise. Senior lawyers have extensive experience and can provide valuable insights and guidance on how to approach legal issues. They can offer a broader perspective and help identify potential challenges and opportunities that may not be immediately apparent to junior lawyers or clients.
Moreover, senior lawyers can communicate in a way that is more business-oriented rather than using complex legal jargon. This is essential for ensuring that legal strategies are effectively understood and implemented by clients and stakeholders who may not have a legal background. A senior lawyer can translate complex legal concepts into clear and meaningful terms that align with the client’s business objectives.
Furthermore, engaging in legal strategy discussions with a senior lawyer allows for creative problem-solving and the exploration of alternative solutions. By considering different perspectives and brainstorming strategies together, clients and lawyers can develop innovative approaches and find the most effective legal solution for their particular situation.
Lastly, legal strategy discussions with a senior lawyer can help ensure compliance with regulations and minimize potential legal risks. Senior lawyers have a deep understanding of the law and can provide guidance on how to navigate complex legal frameworks. They can help identify potential legal pitfalls and develop proactive strategies to mitigate risks and avoid costly legal disputes.
In conclusion, having legal strategy discussions with a senior lawyer is crucial for law firms and clients alike. It allows for the development of a clear and effective approach to legal matters, facilitates knowledge sharing and creative problem-solving, improves communication, and helps ensure compliance and minimize legal risks.
How Do Goldman Lawyers Typical Professional Fees in a Family Law Matter Compare?
The rates are our top senior lawyers range from $550 to $750 per hour excluding GST.
Our senior lawyers must have had at least 10 years of family law experience in running matters. There is very little that we have not dealt with, from small but complex matters, legal aid panels, protective custody and disputes between states and the federal government, the kidnapping of children, complex financial matters, money laundering, cash businesses, domestic violence, multijurisdictional cases and the list goes on.
Our senior lawyers will personally handle your matter and we are simply too busy to stretch out your matter and to be effective at these higher charge rates, we must be quick, decisive, and work to an agreed strategy.
We know what is not important and we know what to cut out. We know where the cases are heading and do not like to drag them on.
Even though our initial rates may seem higher, the eventual outcome will cost less, and we are successful in achieving a better outcome.
We use technology and automation extensively to reduce the time taken for mundane tasks.
What Are Typical Family Law Fees In The Industry
According to the Federal Circuit and Family Court of Australia, parties involved in family law proceedings usually pay their own legal costs. However, there are exceptions to this. The court may order one party to pay the legal costs of another. The amounts payable for a costs order are set out in the scale of costs in Schedule 3 to the Family Law Rules 2021.
The court may also depart from the scale and order that another party pay all of a party’s costs reasonably and properly incurred, which is known as indemnity costs.
The fees for a senior lawyer handling a family law matter can vary depending on factors such as the complexity of the case, the expertise and experience of the lawyer, and the location of the law firm.
In Division 2 of the Family Law Rules 2021, the scale of costs for family law and child support matters is provided.
- For example, for initiating or opposing an application up to the completion of the first court date, the cost can range from $2,512.56 to $3,141.50, depending on the presence of interim orders.
- The fees for attending a hearing can range from $342.19 to $2,512.56 per day, depending on the type of hearing.
- Additionally, there are fees for drafting, conferences, and chamber work, ranging from $277.16 to $721.68 per hour, depending on the level of expertise. Disbursements, such as photocopying and agent fees, are also included in the costs.
These fees are provided as a guide and may vary depending on the specific circumstances of the case and also include Legal Aid Fees.
Per Court Day
Based on another source , the fees for senior lawyers in family law matters can range from $3,000 to $6,000 per day in court. Junior lawyers may charge less due to their developing expertise. These fees are generally for a final hearing and can vary depending on the complexity of the case.
Hourly Rates
Another source mentions that lawyers generally charge an hourly rate for their services. The lowest hourly rate for an admitted lawyer with less than 2 years of experience may be around $300, while the hourly rate for a principal of a law firm with years of experience can be around $600. The fees for talking to a lawyer or seeking legal advice can vary depending on the lawyer’s rate and whether a fixed fee or time-costing method is used.
What Do Barristers Typically Charge?
In a different source, the fees charged by barristers in family law matters are discussed. Barristers are grouped into categories based on their experience and level of expertise. For example, a reader (newly admitted barrister) may charge around $2,500 per day, while a senior junior barrister (with more than five years of experience) may start at around $4,500 per day. Queen’s Counsel and Senior Counsel (more experienced barristers) may charge from $9,000 to $13,000 per day. The choice of barrister will depend on the individual’s case and budget.
In conclusion, the typical professional fees for a senior lawyer handling a family law matter in Australia can vary depending on various factors, including the complexity of the case, the expertise and experience of the lawyer, and the specific services required.
The fees can range from around $2,500 per day for a newly admitted barrister to $13,000 per day for a senior barrister.
Hourly rates for lawyers can range from $300 to $600, and fixed fees may apply for certain services. It is best to consult with a lawyer to obtain an accurate estimate of fees based on the individual’s specific circumstances
Why Do Lawyers Tend To Underquote The Initial Fees? What Can I Do To Protect Myself?
Law firms use various strategies to attract clients, including the initial underquoting of fees. Note: Goldman Lawyers do not use these tactics.
When it comes to marketing, law firms focus on making themselves easy to find online through search engine optimization (SEO) and running SEO campaigns to improve visibility in search results
- One common reason for lawyers to initially underquote client fees is the traditional practice of not advertising prices. Many lawyers were trained by those who practiced at a time when advertisements were prohibited.
- Another reason is that lawyers are often hesitant to bind themselves to a flat fee before knowing anything about the client.
- Each client’s case differs in complexity and requirements, and lawyers may need more information before quoting an accurate fee. For example, a divorce case could range from simple and straightforward to complex and involving multiple assets.
- Furthermore, the unpredictable nature of litigation and transactional matters can make it challenging to estimate the amount of work required.
- Disagreements between parties and unforeseen circumstances may arise during the course of a case, potentially prolonging the work. Lawyers may be reluctant to set a fixed fee upfront when they cannot guarantee the duration or complexity of the legal matter.
- Moreover, lawyers may be concerned that advertising prices could lead to a race to the bottom, with lawyers undercutting each other’s rates.
- While this may benefit consumers, it may not be financially viable for lawyers. Lawyers require compensation that reflects their experience, expertise, and the value they provide to their clients.
- In light of these factors, it may not be advantageous for lawyers to advertise their prices upfront (as we do!!!).
In summary, lawyers initially underquote client fees for various reasons, including the traditional practice of not advertising prices, the need to gather more information about the client’s case, the unpredictable nature of legal matters, and concerns about a race to the bottom in pricing.