When it comes to dealing with family law property matters, it helps to have an understanding of the family law jurisdiction and how to ascertain the asset pool. There are other additional things to discuss and think about once the property pool has been established as best it can, however, this blog post aims to provide a quick overview of jurisdiction and the property pool.
Jurisdiction
The first step in any property matter is to determine the court's jurisdiction to deal with the property of parties to a marriage or de facto relationship. Under the Family Law Act 1975, jurisdiction is conferred on the Federal Circuit and Family Court in both "matrimonial causes" and "de facto financial causes." Matrimonial causes refer to matters between parties to a marriage, while de facto financial causes pertain to matters between parties to a de facto relationship.
Ascertaining the Asset Pool
To ascertain the asset pool, there are three main steps involved:
Identifying Assets, Liabilities, and Financial Resources: The process begins by gathering information about the individual and joint assets, liabilities, financial resources, and other items of each party involved. This includes real estate, bank accounts, shares, personal property, and any debts or loans.
Categorising the Assets and Liabilities: Once the assets and liabilities are identified, they need to be categorised. This involves referring to the definition of property under the Family Law Act and determining the legal and equitable interests of the parties in each item.
Establishing the Value: After categorisation, the next step is to establish the value of each item or the amount of each liability. This may require obtaining formal valuations from qualified professionals such as valuers or forensic accountants.
Property, Financial Resource, or Mere Expectancy
While it is relatively straightforward to identify most types of property, there are certain classes of interest that can be more challenging to categorise. Two examples might be inheritances and notional property.
Inheritances received by a party during a relationship are not automatically protected from being included in the asset pool. The court may consider whether the inheritance has vested and is available to be treated as a financial resource. However, a prospective inheritance, which is an expectation of receiving an inheritance, is not considered property or a financial resource unless specific circumstances apply.
Notional property, also known as "add backs," refers to property that no longer exists but can potentially be added back to the asset pool. Examples include premature distribution of property or dissipation of assets due to waste. The inclusion of notional property in the asset pool is subject to judicial discretion and may vary depending on the circumstances of the case..
Understanding jurisdiction and ascertaining the asset pool are crucial steps in family law property matters. Parties should gather the necessary information (disclosure), categorise assets and liabilities, and establish their value.
Please feel free to reach out if you have any questions!
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