Upon separation, many couples resolve financial matters privately without ever involving lawyers or getting a formal agreement filed in the Family Court (or, in some circumstances, entering into a binding financial agreement).
While this might save money, it also leaves you exposed to future claims against your assets and it might also cost a great deal.
In the recent case of Eufrosin & Eufrosin, the failure of the parties to formalise their financial separation caused a very unexpected outcome years after the relationship ended.
The story went like this: about 6 months after separation the wife won $6 million in Lotto. The husband and wife had not formalised the terms of their financial separation. The husband took the matter to the Family Court and argued that the lottery winnings should be included as part of the property available for distribution.
In its decision, the court noted the wife’s newfound status as a multi-millionaire and awarded the husband $500,000 by way of spousal maintenance.
The moral of the story: failing to formalise a property settlement upon separation leaves both parties vulnerable to assets acquired after the relationship has finished being included (or taken into account) in the property division.
While winning the lottery may be a dream, thought should be given to the possible windfalls that might occur after separation and protecting them by concluding the financial relationship in a formal and legally-binding way. Without such an agreement the assets are at risk. A handshake or informal agreement will not do; a written agreement is unenforceable unless registered as orders in the Court or committed to a Financial Agreement.
Formalising property settlement offers permanent solutions and long-term certainty.
The family lawyers at Frichot & Frichot have extensive experience in finalising financial relationships by way of negotiated and, if necessary, through action in the Family Court.
Please call us on (08) 9335 9877 or complete the form below to request an Introductory Consultation.