When a relationship ends one of the most common initial reactions is to want to sell, burn or otherwise dispose of your former partner’s belongings or things you had purchased together. Whilst there are numerous articles in magazines and online about the psychological and emotional benefits of culling your ex’s stuff, few mention the implications this may have on your family law matters.

What is considered property?
When dividing assets, the Family Court applies a four step process which starts with ascertaining the value of the asset pool available for division. Property is defined by section 4 of the Family Law Act 1975 as:

“Property, in relation to the parties to a marriage or either of them, means property to which those parties are, or that party is, as the case may be, entitled, whether in possession or reversion.”

Whilst this of course includes more obvious items such as real estate, cars, superannuation and bank accounts it also includes various personal belongings such as furniture, artworks, jewellery or collectibles. Essentially, determining an asset pool includes everything that you are your partner own jointly or as individuals.

This can be further complicated when considering matters such as inheritance, pension entitlements and accrued long service leave which may be considered by the Family Court to be a financial resource. It is important to distinguish between what is property and what is a financial resource as this may impact the overall division of assets.

When can I get rid of his/her stuff?
The general position is that no items should be sold, encumbered, damaged or in any other way disposed of until property matters are resolved on a final basis. You may have seen the recent “Art of Divorce” auction held by Russell Crowe in Sydney where he made approximately $3.7 million selling off various artworks, jewellery and collectibles accumulated through his career.

As tempting as it may be to auction off or throw out your ex’s belongings, this ought to be done only following a final agreement, which we recommend is documented by way of formal Family Court Orders to ensure enforceability and finality. Attempting to sell, dispose of or otherwise damage goods involved in family law matter may give rise to urgent proceedings being commenced in the Family Court seeking an injunction against one party from doing.
Find what happens with the kids when you divorce HERE
AND
Find out what happens if the kids DON’T want to be with one of you HERE
We have tons of resources on The Eagle so please feel free to check them all out!

Corynne Cirilli from Town and Country magazine recently asked some high profile New York divorce lawyers what the First Lady would be entitled to if their relationship ended. Trump is famous for demanding pre-nups from his former wives but Melania may be in the box seat when it comes to challenging hers.

Eavesdrop on a steakhouse lunch between divorce attorneys and you’re likely to hear them engaging in their current favorite sport: speculating on the marital arrangement between Donald and Melania Trump. “We love talking about it,” one recently told me. “What’s in the pre-nup? Did it get renegotiated during the campaign, or after he won? How would a split play out?… It’s irresistible conversational fodder.”

During his two previous divorces, Trump stuck mostly to the pre-nup; although Ivana Trump contested it, she reportedly got $14 million, a New York apartment, a Connecticut mansion, and Mar-a-Lago once a year, as well as $650,000 annually for alimony and child support.
[Below- Trump and first wife Ivana]

Marla Maples contested hers, too, and is said to have been awarded around $2 million.

But now that the stakes are higher, we asked a few of the country’s top matrimonial lawyers for their take on what could happen if the first couple were to split.

T&C: HOW IS THE TRUMP PRENUPTIAL AGREEMENT MOST LIKELY STRUCTURED?
Thomas Kretchmar, associate, Chemtob Moss & Forman: I can’t speak to them directly, but in a New York high-net-worth marriage, a pre-nup is primarily designed to protect what is already owned prior to the marriage, versus things that may be accumulated moving forward.

Peter Stambleck, partner, Aronson Mayefsky & Sloan: What I would have recommended to them is a title controls pre-nup. It makes it very clear that, in the event of divorce, everything in his name will be his and everything in her name will be hers.
What would his main concerns have been when structuring the pre-nup?

Stambleck: Billionaires have complicated asset structures. They have shell companies, LLCs, investments in other companies, and it’s very, very complicated. One main purpose of a pre-nup is to avoid having to share in that, but also to avoid the headache that goes into producing all the documents and having accountants come in and look at all of it. Theoretically, that’s what could happen in the absence of a pre-nup.

T&C: HOW WOULD THEY DIVIDE ASSETS- REAL ESTATE, ART, OR JEWELLERY?
Jacqueline Newman, managing partner, Berkman Bottger Newman & Rodd: My guess is real estate will be involved. Obviously, he has the apartment in the city that was his before the marriage, and I can pretty much guarantee he’s not giving it to her. But in situations where I’ve dealt with very high-income, high-asset cases, the moneyed spouse will purchase an apartment for the non-moneyed spouse and the children to live in.

Stambleck: And usually any personal property that directly relates to that person stays with him or her. There’s no question, for instance, that her jewellery will be hers, not his.

T&C: WHAT ABOUT THEIR 11-YEAR-OLD SON, BARRON?
Newman: It’s handled by the courts. Given what I’ve read in the tabloids, it doesn’t seem as if there’s going to be much question as to who the primary caretaker is. My guess is that she would get primary custodial rights and he would get access whenever he happens to be in town.

How much money is she likely to get?
Newman: In this situation, if she has $50 million, she can afford to buy something. But $50 million, while it’s definitely a lot of money, in New York City, for what she’s used to, she wouldn’t be able to replicate what she has now. He probably had a good sense of what kind of lifestyle they’d be living, so I would imagine the payout would be fairly generous.

T&C: WOULD HE HAVE AGREED TO MAINTAIN HER LIFESTYLE?
Stambleck: Can he put in a pre-nup that she’ll have access to the Mar-a-Lago residence for a month in December? Yes, you can literally put anything in the pre-nup. He could say that on 72-hour notice she’ll have use of the plane.

T&C: COULD SHE NOW CHALLENGE THE PRENUP TO ANGLE FOR MORE?
Stambleck: It’s unusual. One of the main reasons to enter into a pre-nup is that, in addition to protecting the wealth, you’re also trying to make it clean—and stay out of the press. In the state of New York, it’s a very high hurdle to try to get a prenuptial agreement overturned.

Kretchmar: An interesting issue with prenups in New York City, which is within a jurisdiction where it’s really very difficult to invalidate a properly prepared, properly entered-into prenuptial agreement, is that it is not unusual to see the non-moneyed spouse still getting a little more in the settlement than the pre-nup entitled him or her to. The non-moneyed spouse may believe that just the idea of challenging the agreement will strike enough fear, stress, and overall agitation into the moneyed spouse—in terms of not wanting to be in the courts, not wanting to be in the gossip pages— that he or she may be willing to pay a little more just to make it go away.

T&C: WHEN TRUMP RAN FOR AND THEN BECAME PRESIDENT, MELANIA’S SITUATION CHANGED. DOESN’T SHE HAVE A LOT MORE LEVERAGE NOW THAT IT’S SO IMPORTANT THAT THE MARRIAGE DOESN’T FALL APART? MIGHT SHE HAVE RENEGOTIATED THE PRENUP?
Kretchmar: Without speculating on any particular case, it’s certainly true that spouses can, during their marriage, modify the terms of an existing prenuptial agreement in response to a material event. is is done in a document called a postnuptial agreement. Sometimes post-nups are used as a stopgap to an eventual divorce. Other times they are genuinely just a revision or refinement of existing rights in light of a change in the spouses’ circumstances.

Newman: It’s very hard to overturn a prenup in New York. The only thing that she could possibly try to argue—and I’m not sure it would succeed—is that when she entered into the agreement she didn’t anticipate he would be president (assuming it was not discussed as a possibility at that time). Therefore, in terms of any spousal support waiver, it would not be fair and reasonable for her to waive spousal support at this time, because there are now more anticipated expenses that she will incur being first lady, especially if she divorces him when he is in office.

This story appeared in the February 2018 issue of Town & Country.

If you have a financial agreement

If you both have a financial arrangement in place when your relationship ends, you must stick with what you have agreed to with regards to how your property and financial resources are to be distributed.

As these types of agreements are binding, it is difficult, although not impossible, to change or overturn them. There are some exceptions to this which include where the financial agreement wasn’t made with your full cooperation or where the court finds (after you have made an application to it) that the financial agreement isn’t fair and equitable.

The full list of exceptions are mentioned HERE.

Check out HERE what else Aussie law says about these agreements

You can make a financial agreement at any time during your relationship, even when it is coming to an end.
Having a financial agreement that you both agree on is helpful as it can speed up the finalising of your property and financial settlement, and also keep the matter from going to court.

Here’s a great video from our friends at Legal Aid:

When you don’t have a financial agreement

If you haven’t made a financial agreement or you don’t think you’ll be able to work out one, you can make an application to the court for a property settlement. (You would both normally do this with the help of your lawyers.)

When seeking a decision from the court, the date of your separation is important. You must lodge your application for a property settlement with the court no more than two years from the date of your separation. After this time you need the court’s permission to apply.

It is also an important date because the court can assess the assets, liabilities and financial resources as at that date.

On this point about the end date…

♦ If you have a registered relationship and you have made application to end it, once the 90 day cooling off period is over, the Registrar will officially revoke your relationship.

♦ If you haven’t got a registered relationship don’t worry, but it is advisable that you keep a clear record of the date of separation even if it is by way of email, SMS or even a social media post. And when you make a statement this way keep it very matter of fact as nasty comments can later be submitted to a court particularly when parenting issues are being worked out. Alternately, you could simply advise a lawyer.

What happens if we go to court?

You can generally make a claim for the court to divide property within two years of the relationship breaking down, and sometimes you can even bring a claim if more than two years have passed.

Before the court can determine your financial dispute, you must satisfy the court of all of the following:

◊ You were in a genuine de facto relationship (either registered or not) with your former partner, which has broken down

AND…

◊ You meet ONE of the following four criteria:

• That the period for the de facto relationship is at least 2 years

• That there is a child in the de facto relationship

• That the relationship is or was registered under a prescribed law of a State or Territory

• You’ve made substantial financial or personal contributions which you won’t be adequately compensated for unless the court makes an order.

AND…

◊ You have a geographical connection to the court handling the matter. This means that it’s important (but not essential) that the court be in the State you currently live in, or where your relationship was based.

AND FINALLY…

◊ Your relationship broke down after 1 March 2009 (or after 1 July 2010 if you have a geographical connection to South Australia only); although in some cases you might be able to apply to the courts if your relationship broke down prior to these dates.

Double check with a lawyer as to whether you fit these criteria before applying to the court.

When a court divides property it takes into account both people’s financial and non-financial contributions to the relationship.

And by non-financial I mean it will look at how you divided up household chores, property maintenance and even the contributions you’ve made as parents.

For de facto couples in particular, it will also take into account the amount of money both you and your former partner earned and will consider any differences in your future earning capacity AND your obligations to care for the children.

Take a look at the fact sheet from Relationships Australia, When De facto Relationships Breakdown, which provides more information about whether you are eligible to make an application for financial matters in the Family Court or Federal Circuit Court.

And what can the court do?

The Family Law Court or Federal Circuit Court can order a division of any property that you both own, either separately or together with each other. This includes superannuation (see the section underneath about super splitting) and spouse maintenance.

………

What about my superannuation?

It never fails to surprise me how many people believe that their super is theirs alone and can never be touched even when divorce or the end of a relationship is near. However, when it comes to property settlements, it’s about getting an equitable division of ALL the assets. In a nutshell, everything is on the table.

When it comes to super you do have the option of sorting out how the division or ‘split’ of your super should occur. Couples who have separated are able to make an agreement – known as a superannuation agreement – about how any superannuation that either party will receive is to be split.

(WA is exception here, with de facto couples in Western Australia  not being subject to the superannuation splitting laws.)

By the way, if you don’t get legal advice the super agreement won’t be binding on the trustee of the superannuation fund.

You can both make a superannuation agreement either before or during your de facto relationship, which states how any superannuation will be split on the relationship breakdown. Because superannuation is different to other property, there are special rules about what a superannuation agreement must say. Provided that a superannuation agreement complies with the legal requirements detailed in the superannuation splitting laws, the agreement is binding.

And when it is binding, the trustee of a superannuation fund must by law implement your agreement. And binding also means the court is not able to make any orders about superannuation.

Here’s a helpful superannuation info kit provided by the Family Court.

What does my payment splitting agreement have to say?

The payment splitting agreement has to say how the superannuation interest is to be split in order for it to operate effectively. Generally, a payment splitting agreement must specify:

• An amount- known as the ‘base amount’.

• A method for calculating the base amount, or a percentage that is to apply to all splittable payments made in respect of the superannuation interest.

(And your entitlement under any payment splitting agreement depends on what the agreement says.)

What if we can’t agree on super splitting?

If despite all opportunities to negotiate both between yourselves and your lawyers you are both unable to agree, then the court is able to make an order about super as part of any property settlement order. This will state how any superannuation is to be split and that order is binding on the trustee of a superannuation fund who must comply with it.

Take a look at what the court considers when it has to make an order because you can’t agree on super (and other property matters).

Pets