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Brett Hartley Accredited Family Law Specialist & Principal Hartley Family Law Services Financial Consequences of Marital S...
Important Facts About Separation <ul><li>Divorce obtained 12 months after separation </li></ul><ul><li>Property Settlement...
Spousal Maintenance <ul><li>No automatic right </li></ul><ul><li>What the Family Law Act provides </li></ul><ul><li>Factor...
Property Settlement <ul><li>Either party may make application </li></ul><ul><li>No compulsion </li></ul><ul><li>Extremely ...
How Property Settlement is Determined by the Court <ul><li>The Family Court has a wide discretion </li></ul><ul><li>There ...
How Property Settlement is Determined by the Court <ul><li>Finalising the  Financial Agreement </li></ul><ul><ul><li>By Co...
Binding Financial Agreements <ul><li>Why should your clients enter into such Agreements </li></ul><ul><ul><li>Provide cert...
Binding Financial Agreements <ul><li>Who needs an agreement most </li></ul><ul><ul><li>People entering into second marriag...
Super Splitting – Treatment of Superannuation as Property   <ul><li>New laws encapsulated in: </li></ul><ul><ul><li>Amendm...
Super Splitting – Treatment of Superannuation as Property <ul><li>New laws allow super interests to be split </li></ul><ul...
Super Splitting – Treatment of Superannuation as Property <ul><li>What to do before 28 December 2002 </li></ul><ul><ul><li...
Super Splitting – Treatment of Superannuation as Property <ul><li>Super Splitting Orders </li></ul><ul><ul><li>Depends on ...
Super Splitting – Treatment of Superannuation as Property <ul><li>Defined Benefit Scheme </li></ul><ul><ul><li>Can’t creat...
Super Splitting – Treatment of Superannuation as Property <ul><li>Defined Benefit Scheme </li></ul><ul><ul><li>Non-member ...
Super Splitting - Superannuation Agreements <ul><li>Binding financial agreement can contain an agreement concerning supera...
Super Splitting - Valuation Requirements <ul><li>Accumulation Funds relatively easy to value </li></ul><ul><ul><li>Contrib...
Super Splitting - Valuation Requirements <ul><li>Defined Benefit Fund is a lot more complex </li></ul><ul><ul><li>Specific...
Super Splitting - Obligations Upon Trustees <ul><li>SIS regulations impose new obligations </li></ul><ul><li>Payment Split...
Super Splitting – Effect of Death <ul><li>Important to consider the effect of death when looking at Super Splitting Orders...
Super Splitting – Specific Financial Planning Issues <ul><li>New ETP for non-member spouse </li></ul><ul><li>Essentially, ...
Brett Hartley Accredited Family Law Specialist & Principal Hartley Family Law Services A Legal Firm Practicing Exclusively...
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Family Law Slideshow

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What the Family Law Act provides

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Transcript of "Family Law Slideshow"

  1. 1. Brett Hartley Accredited Family Law Specialist & Principal Hartley Family Law Services Financial Consequences of Marital Separation & an Introduction to the New Super Splitting Laws
  2. 2. Important Facts About Separation <ul><li>Divorce obtained 12 months after separation </li></ul><ul><li>Property Settlement 1 year after divorce </li></ul><ul><li>File for property settlement upon separation </li></ul><ul><li>Spousal & Child Maintenance </li></ul><ul><li>Resolve property settlement properly </li></ul><ul><li>Capital Gains Tax and Stamp Duty Exemptions </li></ul><ul><li>Prepare a new Will </li></ul><ul><li>Examine your Superannuation Policies </li></ul>
  3. 3. Spousal Maintenance <ul><li>No automatic right </li></ul><ul><li>What the Family Law Act provides </li></ul><ul><li>Factors the Court looks at </li></ul><ul><li>… Reasonably able to do so </li></ul><ul><li>Lump sum or periodic maintenance </li></ul><ul><li>Urgent and interim orders </li></ul>
  4. 4. Property Settlement <ul><li>Either party may make application </li></ul><ul><li>No compulsion </li></ul><ul><li>Extremely important to resolve after separation </li></ul><ul><li>12 month time limit after divorce </li></ul><ul><li>The notion of fault is irrelevant </li></ul>
  5. 5. How Property Settlement is Determined by the Court <ul><li>The Family Court has a wide discretion </li></ul><ul><li>There are three steps: </li></ul><ul><ul><li>Determine the net value of all property </li></ul></ul><ul><ul><ul><li>ascertain & value property </li></ul></ul></ul><ul><ul><li>Contributions </li></ul></ul><ul><ul><ul><li>financial, non-financial, welfare of family </li></ul></ul></ul><ul><ul><li>Examining Other Circumstances </li></ul></ul><ul><ul><ul><li>age, health, income, children, duration… </li></ul></ul></ul>
  6. 6. How Property Settlement is Determined by the Court <ul><li>Finalising the Financial Agreement </li></ul><ul><ul><li>By Consent Orders or Binding Financial Agreements </li></ul></ul><ul><li>Binding Financial Agreements </li></ul><ul><ul><li>Overview of Legislation </li></ul></ul><ul><ul><li>Entered into: before marriage, during the marriage or after the dissolution of the marriage </li></ul></ul>
  7. 7. Binding Financial Agreements <ul><li>Why should your clients enter into such Agreements </li></ul><ul><ul><li>Provide certainty </li></ul></ul><ul><ul><li>Protect ownership of assets brought in </li></ul></ul><ul><ul><li>Protect ownership of inheritances </li></ul></ul><ul><ul><li>Protect ownership of business interest </li></ul></ul><ul><ul><li>Prevent costly, lengthy litigation </li></ul></ul><ul><ul><li>Peace of mind & binding on the estate </li></ul></ul>
  8. 8. Binding Financial Agreements <ul><li>Who needs an agreement most </li></ul><ul><ul><li>People entering into second marriage, to provide for pre-existing children </li></ul></ul><ul><ul><li>People entering into second or subsequent relationships/ marriage </li></ul></ul><ul><ul><li>Couples employing asset protection </li></ul></ul><ul><ul><li>People with substantial assets </li></ul></ul><ul><li>Stamp Duty and Capital Gains Tax relief </li></ul>
  9. 9. Super Splitting – Treatment of Superannuation as Property <ul><li>New laws encapsulated in: </li></ul><ul><ul><li>Amendments to the Family Law Act </li></ul></ul><ul><ul><li>The Family Law Superannuation Regs </li></ul></ul><ul><ul><li>Amendments to the SIS Regs </li></ul></ul><ul><li>Operational from 28 December 2002 </li></ul><ul><li>Radically alter the way super is treated upon the breakdown of a marital relationship </li></ul><ul><li>Define superannuation as property </li></ul>
  10. 10. Super Splitting – Treatment of Superannuation as Property <ul><li>New laws allow super interests to be split </li></ul><ul><li>Far reaching impact: </li></ul><ul><ul><li>Approx 43% of all marriages end in divorce </li></ul></ul><ul><ul><li>Most separate between 10-30 years </li></ul></ul><ul><ul><li>Average age people marrying increasing </li></ul></ul><ul><ul><li>The vast majority have superannuation </li></ul></ul><ul><ul><li>Super represents 20-60% of total wealth </li></ul></ul><ul><ul><li>24Mil a/c, av bal $54,000, double by 2020 </li></ul></ul>
  11. 11. Super Splitting – Treatment of Superannuation as Property <ul><li>What to do before 28 December 2002 </li></ul><ul><ul><li>Enter into Orders and leave super </li></ul></ul><ul><ul><li>Delay property settlement until after 28/12 </li></ul></ul><ul><ul><li>Interim property orders </li></ul></ul><ul><li>Splitting & Flagging Orders </li></ul><ul><li>New laws apply to most fund, including: </li></ul><ul><ul><li>Defined Benefit Funds & </li></ul></ul><ul><ul><li>Accumulation Funds </li></ul></ul>
  12. 12. Super Splitting – Treatment of Superannuation as Property <ul><li>Super Splitting Orders </li></ul><ul><ul><li>Depends on type of fund and type of benefit </li></ul></ul><ul><ul><ul><li>Defined benefit or accumulation </li></ul></ul></ul><ul><ul><ul><li>Growth phase or payment phase </li></ul></ul></ul><ul><ul><li>Payment splitting regime </li></ul></ul><ul><ul><li>Base Amount </li></ul></ul><ul><ul><li>Create a new superannuation interest – with or without a super splitting order </li></ul></ul>
  13. 13. Super Splitting – Treatment of Superannuation as Property <ul><li>Defined Benefit Scheme </li></ul><ul><ul><li>Can’t create new interest for non-member </li></ul></ul><ul><ul><li>Can’t roll out interest for non-member </li></ul></ul><ul><ul><li>Base amount gives rise to creation of a new account within the members account, preserved & grows at an inflation factor </li></ul></ul><ul><ul><li>Non-member spouse paid first when member spouse entitled to payment </li></ul></ul><ul><ul><li>Piggy Back Order </li></ul></ul>
  14. 14. Super Splitting – Treatment of Superannuation as Property <ul><li>Defined Benefit Scheme </li></ul><ul><ul><li>Non-member has no control over when payment received – solely dependant upon the member deciding to retire </li></ul></ul><ul><ul><li>Flagging orders will be used when it is likely that the member will soon satisfy a condition of release – e.g. retire or redundancy </li></ul></ul><ul><ul><ul><li>Placed on the Trustee preventing payment to member until flag is lifted </li></ul></ul></ul>
  15. 15. Super Splitting - Superannuation Agreements <ul><li>Binding financial agreement can contain an agreement concerning superannuation interests </li></ul><ul><li>Referred to as Superannuation Agreements </li></ul><ul><li>Valuation Requirements </li></ul><ul><ul><li>If there is a dispute between the parties, Family Court must value the super interest according to the Family Law Regulations </li></ul></ul><ul><ul><li>If parties reach agreement – not bound by Valuation methods </li></ul></ul>
  16. 16. Super Splitting - Valuation Requirements <ul><li>Accumulation Funds relatively easy to value </li></ul><ul><ul><li>Contributions & interest less admin charges </li></ul></ul><ul><ul><li>Difficulty in valuing at any given point in time </li></ul></ul><ul><ul><li>Use linear interpolation techniques </li></ul></ul><ul><ul><li>Deduct amounts payable under an earlier payment spit from a previous marriage </li></ul></ul><ul><ul><li>Deduct surcharge debt </li></ul></ul>
  17. 17. Super Splitting - Valuation Requirements <ul><li>Defined Benefit Fund is a lot more complex </li></ul><ul><ul><li>Specific regulations in Family Law Regs </li></ul></ul><ul><ul><li>Involves complex actuarial calculations </li></ul></ul>
  18. 18. Super Splitting - Obligations Upon Trustees <ul><li>SIS regulations impose new obligations </li></ul><ul><li>Payment Splitting Regime Orders </li></ul><ul><li>Non-member spouse requesting information from a Trustee </li></ul><ul><li>Provision of information is mandatory by Trustee </li></ul><ul><li>Trustee has obligations upon receipt of the Super Splitting Orders </li></ul><ul><li>Follow two separate paths re base amount </li></ul>
  19. 19. Super Splitting – Effect of Death <ul><li>Important to consider the effect of death when looking at Super Splitting Orders & Agreements </li></ul><ul><ul><li>Death of non-member spouse </li></ul></ul><ul><ul><ul><li>Accumulation Funds </li></ul></ul></ul><ul><ul><ul><li>Defined Benefit Scheme </li></ul></ul></ul><ul><ul><li>Death of a member spouse </li></ul></ul><ul><ul><ul><li>Accumulation Funds </li></ul></ul></ul><ul><ul><ul><li>Defined Benefit Scheme </li></ul></ul></ul><ul><ul><li>Exception relates to payment re children </li></ul></ul>
  20. 20. Super Splitting – Specific Financial Planning Issues <ul><li>New ETP for non-member spouse </li></ul><ul><li>Essentially, Super Splitting creates two ETP’s </li></ul><ul><li>Both member & non-member spouse will have separate RBL’s </li></ul><ul><ul><li>Depends on whether the interest is split under the regs or a Payment Splitting Order </li></ul></ul><ul><ul><li>Different considerations for pension payments </li></ul></ul><ul><ul><li>ESP set to zero for non-member </li></ul></ul>
  21. 21. Brett Hartley Accredited Family Law Specialist & Principal Hartley Family Law Services A Legal Firm Practicing Exclusively in Family Law & Defacto Law Level 15, Brisbane Club Tower, 241 Adelaide St, Brisbane 4000 Ph: 07 3220 1299, Fax: 07 3220 1277, Mobile: 0417 569 299 email: brett@hartleyfamilylaw.com.au home page: www.hartleyfamilylaw.com.au Financial Consequences of Marital Separation & an Introduction to the New Super Splitting Laws
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