In family law financial proceedings, it is crucial to identify and assess the type and value of a party's interest in corporations, trusts, partnerships, and businesses. These interests need to be included in the disclosure process and then included in the financial documents for court or settlement. This blog post aims to provide a baseline understanding of how these entities are categorised and dealt with in family law matters.
Interests in entities such as corporations, need to be identified and assessed. It is important to note that the company itself is not included as an asset, but rather the number and class of shares owned by the party. Loan accounts with the corporation should also be considered, as they can be categorised as assets or liabilities based on whether they are credit or debit accounts. The value of a business, including any goodwill component, may be determined by an expert.
In family law financial proceedings, a trust may be categorised as an asset of one of the parties if it can be demonstrated that the party controls the trust and is also a beneficiary. Control, nature of beneficiary interests, history of distributions from the trust to the party will be examined in order to determine whether the trust's assets are considered the property of the parties or an interest that could be categorised as a financial resource.
When navigating family law financial proceedings, it is essential to gather all relevant documents and information regarding corporations, sole traders, trusts, partnerships, and any other businesses or documentation pertaining to the same. Understanding the categorisation and treatment of these entities will help ensure a comprehensive assessment of the parties' interests. It is advisable to consult with professionals to navigate the complexities of these issues effectively.
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