Not all marriages result in a happily ever after… that’s why RMB Lawyers say you need to formalise your divorce properly.
In the last year alone 119,188 people tied the knot. While the majority of these will lead to lifelong relationships, the reality is a large portion of them won’t.
In the past two years, nearly 100,000 marriages ended in divorce, with 49,404 separations in 2018 and 49,032 in 2017. Nearly all of these would have required negotiations around property and assets.
That’s why Bradley Peterson – an associate at RMB Lawyers who focuses his legal career upon family law – says it’s imperative to formalise your separation agreement, even if it is amicable.
When assets and property are involved, he says, leaving ambiguity can expose both parties to unwanted financial risk and hardship.
“If you and your partner have reached an agreement for the distribution of your assets it should be formalised as a Court Order or in a Financial Agreement,” Mr Peterson explained.
“It provides security and peace of mind to both of you to know the matters are finalised. It is also necessary to effect a superannuation split; to obtain a stamp duty exemption for the transfer of a property; and for rollover relief for CGT.”
It is equally important to disclose all assets and material facts relevant to the matter. If you don’t, it could cost you more than you bargained for.
“Each party is obliged to provide a financial disclosure, which includes documents that evidence their current financial position,” Mr Peterson explained.
“This is an important step to ensure both parties are wholly aware as to the composition of the asset pool and to ensure that the entire asset pool is accounted for,” he continued.
“Even if property is held solely by you, it forms part of your asset pool. If you owned it before your relationship or post-separation, if you haven’t formalised you’re settlement everything forms part of the pool.
“It becomes a question of how the parties have contributed to the acquisition of assets that may be of relevance.”
By formalising your arrangement you insulate yourself from all of these issues. Additionally, and perhaps most importantly, before you enter into a legally binding agreement it is important to understand the process, your rights and what you’re legally entitled to. For this reason, it is advisable to consult a solicitor.