Divorce – it’s that ugly word no one likes talking about. Going through a divorce is not only stressful but it can be complicated when ensuring all your assets are needing to be protected.
Like any partnership, marriage can come to an end. It is certainly a topic that is hard to directly discuss up front. However, when spouses do call it a day, there is often collateral damage which can occur when matters like this are not planned for. Tougher economic times can lead to financial stress which is a leading cause of divorce in Australia.
So, when it comes to making sure your assets are protected should you go through divorce, here are a few key points to note:
YOUR ASSETS VS DIVORCE
- The family court will see everything, your spouse knows what you have and where it is hidden
- Trusts are a grey issue, sometimes they can be excluded, or just assessed for the income, not the assets they hold, however you can’t simply move assets into a Trust before deciding to divorce
Myth 1: My assets are in a Trust or in my Super, therefore they’re protected. Not true, as the Family Court will have access to companies, trusts and superfunds.
Myth 2: ‘We are not married therefore, no problems.’ If you live under the same roof for at least 6 months - the courts will determine you are in a de-facto relationship which is treated under the Family Court.
LEGAL MATTERS TO TAKE INTO ACCOUNT
- A good lawyer here is invaluable, don’t find the cheapest around, a specialist in Family Law is invaluable.
- Don’t throw good money after bad, in the emotion of getting your fair share of the marital assets.
- Ensure that you have good advisors who can logically let you know when to concede. Too often, experiences exist when the biggest benefactor for the divorce split is not the spouse or children, but the lawyers.
- Keep your accountant directly involved all the way, to help get the right information you need to your legal team. This can save you thousands in legal fees as they try to interpret a blurred picture.
REVIEW YOUR STRUCTURE
When the smoke clears, it is a good time to review your structures and estate planning, superannuation beneficiaries and insurance. The importance of conducting this review is:
- You will not want all your hard-earned assets accidently passing to your ex-spouse because you forgot to update your beneficiary details on your super.
- Protection for your children - testamentary trusts or bloodline trusts become good vehicles to look at ensuring that the new partner cannot seize control of assets in the event you have passed away, diluting what is left for your kids.
- Most assets in divorce can be transferred to respective spouses with No Stamp Duty, however important to note that you cannot change assets from your name into trusts or companies and get stamp duty exemptions
Divorce is a contentious issue and can be hard for people to talk about. If you are going through a divorce or are headed down that path, call your Business Advisor at Mulcahy & Co Sunshine Coast to schedule a no-obligation consultation to review your situation and position so that we can attain the best outcome for you. Feel free to call us on 07 5413 9300.