Step 1: What is the property pool available for division?
The Property Division process starts by working out what each spouse owns. This includes items like cars, bank accounts and real estate and also businesses and trusts. All the property to which the couple is entitled to is in the property pool for division between them. The property may be owned by a spouse individually, jointly with the other spouse or jointly with other people.
The types of assets and debts that are usually in the property pool are:
- Assets: House, Cars, Bank Accounts, Furniture and Furnishings, Jewellery, Shares (in a publicly listed company such as Telstra, or in private company such as the trading company of the family business), Family Trust (this may be where the Family Trust owns the family business).
- Superannuation is also included in the property pool available for division.
- Debts: Home loan, credit card, personal loan, consumer credit.
How to find out about your ex-partner’s property
Parties have a duty to the Court and to each other to make full and continuing disclosure of their financial circumstances that are relevant to an issue in dispute. If you and your ex-partner reach an agreement, or the Court makes Orders, where full financial disclosure has not been made, there is a risk of a penalty for the non-disclosing person or that the agreement or Orders will be set aside by the Court. In addition, a Family Lawyer cannot assist a client to hide assets or to continue to act for a client where they know the client is not making full disclosure.
Even where a person does not provide full financial disclosure, any transfers of money or property can generally be traced by obtaining the relevant documents under Subpoena. Where assets have been transferred to other people to defeat a Family Law property claim, the law provides that these assets can be “clawed back” into the property pool available for division.
The exception to this is cash: dealings in cash are difficult to trace and therefore difficult to claw back. If you are aware that your ex-partner has dealt with cash, photographic evidence of large amounts of cash, such as cash that they have stored in a box in the home, can assist you to prove this later.
Valuing the assets
For the purposes of a Property Division, assets are valued at the current market value at the date of the division. Therefore, the value of the assets must be at the current market value at the time they are being valued, not their value at separation or some other date.
Where each party wishes to retain certain assets from the property pool, it stands to reason that they want to keep the valuation of that asset as low as possible – the lower the value of the assets they are keeping, the more they will get of the remaining property pool to make up the percentage they are entitled to.
Where significant assets, such as real estate or business interests, are part of the property pool, there can be a difference in the respective positions of each party of hundreds of thousands of dollars.
When parties do not agree on the value of an asset, an indication of value (such as a real estate market appraisal, a Red Book valuation, or a receipt (for smaller items such as furniture or jewellery), will often resolve the dispute.
If the dispute continues, an expert valuation report may help to settle the dispute, but not always. Occasionally, each party will have expert valuation reports that give differing values. Therefore, before ordering a valuation report, the parties should agree on the valuer to be appointed, pay equally for the report and agree to be bound by the value provided in their valuation so as not to waste money on valuation reports which are disputed by the other party.
Even where the parties have obtained a joint valuation report, disputes about value can continue on the basis that the valuation report was not properly prepared. Sometimes, a valuation dispute will not be resolved until a final Court hearing where a Judge will make a decision, based on the evidence, of the current market value of the asset.