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Five things accountants should know about family law

Five Things Accountants Should Know About Family Law

For solicitors and accountants, ‘simple’ family law matters are becoming far less common. We’re seeing more and more clients coming to us with complex legal structures such as companies, trusts and self-managed super funds (SMSFs).

This often results in solicitors and accountants working collaboratively in order to obtain information about the family business, what agreement would have the least taxation implications for a party, and the implementation of orders regarding company structures and SMSFs.

As an accountant, you could be the first professional your client speaks to about their separation.  While you should never provide legal advice about possible property settlement outcomes, it would be helpful for your practice to have a basic understanding of the principles of family law. This way you’ll know what may be required of you throughout the process and be better able to assist your client get the help they need.

We’ve put together a few key things that accountants should know about family law.
  1. There are four steps in a property settlement:
    1. Preparing an agreed list of the value of the various assets and debts. This may include exchanging Financial Statements for any company, partnership, trust or a SMSF, usually for the last three financial years, and obtaining a business valuation, if required.
    2. Assessing each party’s contributions, both financially and non-financially. This includes at the commencement of the relationship, during the relationship and post separation.
    3. Looking at the future needs of each party. This will include exchanging the parties’ income tax returns and Notices of Assessment.
    4. Ensuring that there is a just and equitable outcome for both parties.

Providing your client and their solicitor with the financial information you hold relating to their income, business, trust and/or SMSF greatly assists the property settlement process.

  1. The parties shouldn’t wait too long to do their property settlement. In family law, the property settlement is carried out on the value of the assets and debts which exist as at the date of doing the property settlement – not the date of separation (though that is important too). In our experience, the longer parties leave it to do a property settlement, the more difficult it can be as each party may have acquired or disposed of assets since separation.
  2. There are time limits that apply in family law. For example, if a party is divorced, they only have 12 months from the date of divorce to commence court proceedings for property settlement. If the parties were in a de facto relationship, they only have two years from the date of separation.
  3. Be aware of any potential conflict of interest between you and the business or parties personally. Seek independent legal advice if you’re concerned.
  4. Refer your client to the right family law solicitor as soon as possible. If the parties have complex legal structures in place, they will likely need a specialist family law solicitor who has an in-depth knowledge on how these structures work.

When referring a matter to Catherine Henry Lawyers, you can feel confident that your client will be looked after by our expert team of family lawyers. The team is headed by Alan Wright who is an Accredited Specialist in Family Law, Accredited Mediator and has almost 30 years’ experience dealing with complex property settlement matters.

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