Just because you physically separate from your partner does not mean that your finances are separated too.
You might be surprised to discover that you or your ex-partner can freely spend joint funds (referred to as post-separation spending) prior to finalising property settlement, which may impact what you each eventually receive.
“How can this happen and how is it reconciled at settlement?”
As a starting point, the Family Court will consider the assets and liabilities of the parties at the date of the Hearing. This means that if you separate from your partner and don’t take steps to legally finalise property settlement, years later, you may find property settlement will be more complicated to resolve, particularly in circumstances where one partner may have spent significant amounts of money post-separation, and the other partner may have increased their assets.
The Family Court will consider each partner’s post-separation spending, but often the final outcome will not result in a dollar for dollar reconciliation. As a general rule, the Court are hesitant to add-back assets that are no longer in existence at the time of the hearing, although this approach can vary depending on the circumstances of the case.
Timely advice is important.
We can provide you with advice prior to separation and/or after separation on how to protect your relationship assets to reduce the risk of these assets being dissipated prior to reaching final agreement, or an adjudication at trial.
At Dimond Family Lawyers, we have a focus on assisting parties to reach settlement without the need for court action if possible, having the effect of minimising financial risk and wasted legal costs. If it isn’t possible to reach a functional, negotiated settlement, then our professional team will help guide you through any necessary litigation.
Call us today on 9443 1111 to make sure you are informed of your legal rights so that you can plan ahead.