It is not uncommon for a party to a marriage or de facto relationship to receive an inheritance either before, during or after their relationship. Put simply, unless the parties entered into a Financial Agreement (made pursuant to the Family Law Act 1975 (Cth)) setting out how any inheritance would be dealt with in the event of separation, then:

• the inheritance is not excluded or otherwise quarantined from the assets and liabilities to be divided between spouses following separation; and
• the amount of the inheritance is not allocated back to the spouse who received it.

How a Court determines a split of assets between spouses?

The following 4-step approach is applied by the Court:
1. Ascertain the current assets, superannuation, liabilities and financial resources of the parties
2. Assess the contributions (financial, non-financial, homemaking and parenting) of the parties at the commencement of, during and after their relationship
3. Assess the future needs of the parties (for example, who might have the care of infant children, any difference in the parties’ income earning capacities, the age and state of health of the parties)
4. Consider whether the proposed orders are just and equitable in all of the circumstances

What impact does it have?

How an inheritance is dealt with in the event of separation will generally involve consideration of the following:

• The timing and the length of the relationship
• The amount received
• How it was applied
• The financial circumstances of the parties at the time of the Court’s decision

The timing of the inheritance is important. For example, if a party received their inheritance in the early years of a 25-year relationship then depending upon the amount and how it was applied, the inheritance may not result in a significantly higher contributions assessment to the party who received it. This is because often during long relationships each spouse makes various financial, non-financial, homemaking and parenting contributions which can offset a financial contribution by way of an inheritance.

Conversely, if the inheritance was received late in the relationship or after separation or the parties were in a short-term relationship, then the party who received it will likely receive a higher contributions assessment.

The amount received will affect the Court’s ultimate determination. If modest in light of the parties’ combined net assets (for example a $50,000 inheritance compared to net assets of $1.5 million) then this may have little effect on the Court’s assessment of contributions. However, if the inheritance comprised $1 million of a $1.5 million property pool, then it is highly likely the contributions would be assessed in favour of the spouse who received the inheritance.

It will also be relevant for the Court to consider how the inheritance was applied. If it was used to fund family holidays or extravagant purchases and is no longer represented in the parties’ net assets, then it will carry less weight when assessing contributions compared to an inheritance which was used to purchase a family home or investment property, establish a share portfolio or contribute to superannuation and that asset/s still exists at the time of determination. It may also be relevant in the Court’s determination if the inherited funds are kept separate and not otherwise intermingled with the parties’ joint assets.

The financial circumstances of the parties at the time of any determination is also a relevant consideration, particularly if a spouse has received an inheritance following separation. For example, if the parties had net assets of $1 million and there was a post-separation inheritance of $500,000, a Court would not likely consider it just and equitable if one spouse received total net assets of $500,000 and the other spouse received the remainder plus the inheritance (total assets of $1,000,000). In that instance the Court may consider awarding the spouse without the inheritance a larger percentage of the net assets.

What if you are a beneficiary under a Will or Estate but the testator has not yet passed away?

This question often arises when a party or their spouse has a parent who is elderly or unwell. A future inheritance will generally only be taken into account by the Court if the testator’s death is imminent and there is evidence of that (for example, a medical report) and what entitlement the spouse might have in the testator’s estate. In that instance, the inheritance cannot be included in the assets to be divided between the parties but the Court can consider it at step 3 of the 4-step process in assessing the parties’ future needs.

How can an inheritance be protected?

As between spouses, the only way to protect an inheritance in the event of separation is to enter into a Financial Agreement pursuant to the Family Law Act 1975 (Cth). For a Financial Agreement to be binding it must meet specific requirements set out in the legislation, including that before signing the Agreement each party to the Agreement obtain independent legal advice as to:
• The effect of the agreement on the rights of that party; and
• The advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement
The terms of a Financial Agreement are tailored according to the individual circumstances of the case and most importantly, what agreement can be reached between the parties. A Financial Agreement can be entered into before, during or after a marriage or de facto relationship. Some options for a Financial Agreement are:
• Any assets (including an inheritance) a party has at the commencement of their relationship are excluded from any division of assets between them;
• Any assets (including an inheritance) a party acquires in their sole name during the relationship are excluded from any division of assets between them;
• Any inheritance received by a party is excluded in its’ entirety; or
• The Agreement specifies what portion of that inheritance the other spouse receives in the event of separation.

If you and your spouse have separated and there is the possibility you might receive an inheritance into the future it is important to finalise your property/financial settlement with your spouse as soon as possible (and before the death of the testator) and have any agreement reached formally documented in either Consent Orders filed in the Family Court of Australia or in a Financial Agreement. Provided your agreement is formally documented and there are no other grounds (such as fraud) on which the Order or Agreement can be set aside, then your spouse cannot later claim they are entitled to receive any portion of an inheritance you might receive into the future.

If a testator is concerned about whether any gift they leave to a beneficiary will be attacked in family law proceedings, then the testator might wish to consider whether there are any asset protection options available to them and make any changes to their Will and estate planning while they still have capacity to do so.

If you require family law advice, please contact Tuskeen Jacobs or Renée Kinman, Queensland Law Society Accredited Family Law Specialists on (07) 3009 8444 to arrange an initial consultation.

While there is no doubt that a taxation liability of one spouse can be taken into account as part of a property settlement, the Family Court has recently confirmed that one spouse can be substituted for the other spouse in what is commonly referred to as sexually transmitted debt. This in terms of a liability owing to the Australian Taxation Office.

In Tomaras & Tomaras and Official Trustee in Bankruptcy and Commissioner of Taxation, the Wife and Husband agreed that the Wife’s debt to the Commissioner of Taxation (approximately $250,000) was to be passed to the Husband, in that he would be substituted for the debt.  Proper notice was given to the Commissioner, who opposed the making of the Order.

The Commissioner was granted permission to intervene in the couple’s property settlement proceedings, resulting in the matter being referred to the Full Court of the Family Court of Australia.

In dealing with the case, the Full Court had to examine whether the Commissioner of Taxation was firstly bound by the relevant provisions of the Family Law Act.  This is because there is a presumption that statutory provisions in general terms, do not bind the Crown.

The Full Court determined that the Crown presumption did not apply as the Crown could certainly benefit from the provisions of sexually transmitted debt (for instance, the substitution of such a debt could allow a more financially wealthy party to assume the debt, rather than an impecunious spouse).

Why is this decision important?

Where a non-financial spouse ends a relationship with significant personal taxation liabilities, it may be open to that spouse as part of their property settlement, to seek a substitution order rather than the liability remaining in their sole name or being paid from the available property.

For other spouses who may have been unwilling to share in the burden of a taxation liability accrued during the relationship, the liability can be included in the available property and can also be transferred directly to the other spouse if it would be just and equitable to do so. This case highlights the importance of spouses being aware that they may ultimately be responsible for another spouse’s taxation liabilities or penalties arising from their failure to lodge taxation returns or meet payment of taxation liabilities.

The principles of the case are important, but before Husbands and Wives get excited about substituting each other for pending tax debts, the Commissioner must be afforded procedural fairness (i.e given sufficient notice about the proposed Order) and further, if it is not foreseeable at the time, that the Order would result in the debt not being paid in full – in other words, if there is any doubt about the debt being paid in full by the substituted party, then the Court could not make the Order.

This case demonstrates that when it comes to tax liabilities:

• Parties should consider substitution of taxation liabilities as an option when drafting orders sought or negotiating settlements. However, note that the Order should be phrased in such a way as to direct the Commissioner to substitute one party for the other as opposed to stating that a party be solely responsible for the debt; and
• It cannot be assumed that the tax liability will remain with the original tax payer in property settlement proceedings.

Financial planners and/or accountants should be consulted early in negotiations to advise as to the most tax effective way in which the ability to substitute parties to a taxation liability should be undertaken.

At Rostron Carlyle Rojas Lawyers we pride ourselves in understanding the needs of our clients and helping them to navigate a property settlement that minimises their exposure to taxation and disruption to their professional lives, wherever possible.

If you require family law advice, please contact Tuskeen Jacobs or Renée Kinman, Queensland Law Society Accredited Family Law Specialists on (07) 3009 8444 to arrange an initial consultation.

When a relationship breaks down, it can be a very painful experience for both parties involved. If you are married, breaking up can sometimes be a lot easier when it comes to dealing with the legal side of things. However, if you and your partner never made that commitment and have been living together as a couple, then splitting up can sometimes be a bit more complicated. This is what is called a de facto relationship.

Rostron Carlyle Rojas are the leading experts in family law in Brisbane and understand how difficult dividing assets up can be when a de facto relationship comes to an end. There is more to breaking up than just dividing your CD collection between the two of you. As the law recognises de facto relationships in several different ways, it can be quite difficult to understand what your rights may be. That is why it is advised you seek a family lawyer.

In some areas of the law, a de facto relationship is treated like a marriage

In some areas of the law, a de facto relationship is treated like a marriage. For example, a de facto partner might be entitled to the same rights as a married person when one partner dies without a will, or superannuation is claimed after the death of a partner. There could also be entitlements should one partner become ill and decisions about their health need to be made or organ donation needs to be considered.

However, there is a common misconception that if you have lived with someone for a certain period of time, then you are automatically entitled to half of everything they own. A relationship is defined by more than just time. That is why it is essential that you seek professional advice, who can tell you exactly what your rights are and how you can go about claiming what you are entitled to properly.

If you and your ex-partner had children together, then you need to find out where you stand when it comes to child maintenance and what visitation rights you have. A good family lawyer can also help deal with any disputes there might be over debt, property agreements and shared belongings. They will advise you on the correct way of dealing with the issues surrounding your break up and should it be heard in a family law court, they will fight your case and help you find a solution to the problem.

For more advice concerning a defacto relationship and the legal rights you have, talk to a lawyer at Rostron Carlyle Rojas today.

The Federal Government recently announced that the Family and Federal Circuit Courts of Australia will soon be merged in an attempt to slash blown-out waiting times and reduce trauma for families.

Both courts have power to decide family law disputes, however the Family Court is reserved for more complex family law matters such as, valuation of interests in trusts or corporate structures, matters that involve a child welfare agency, allegations of sexual or physical abuse or international relocation of children.

The Federal Circuit was originally established to deal with the shorter, simpler family law matters, freeing up the Family Court.   In addition to hearing family law matters, the Federal Circuit Court is also responsible for hearing general matters such as administrative law, bankruptcy, industrial law and migration.

Presently in Brisbane, there are 4 Family Court judges and 11 Federal Circuit Court judges.  The merger will see judges from the Family Court hear family law matters, while Federal Circuit Court judges will continue to hear family and general matters.  Over time however, all judges will hear both family and general law cases.

Statistics released show that the median time taken to reach a trial has grown in both courts, with a national average of 15 months in the Federal Circuit Court and 17 months in the Family Court.

Often times, a matter may commence in the Federal Circuit court but issues arise that deem the matter complex, meaning the matter will be transferred to the Family Court.  Once transferred between courts, a matter does not ‘skip the queue’ of matters awaiting court dates.  It is allocated a date alongside all other matters filed in court that day, irrespective of the matter having been in the court system for months already.  With over 1,200 matters transferred between the two courts each year, the consequence is a delay in the progression and resolution of matters and invariably a ‘double up’ in legal fees.

Attorney-General Christian Porter says the merging of the two courts will “remove the red tape that drags out complex trials and will have the potential in time to allow up to an extra 8000 cases to be resolved each and every year.”

The merger will also result in there now being one set of court rules and unified practices and procedures in place, making it not only easier for the increasing number of self-represented litigants that appear before the courts every day, but providing more certainty as to possible court outcomes.

For confidential advice and assistance about your family law situation, contact Accredited Specialist in family law, Tuskeen Jacobs of Rostron Carlyle Rojas Lawyers at [email protected] or 07 3009 8444.

The change in the law and what you should be thinking about if going to court.

Imagine this situation – you and your ex were involved in lengthy and acrimonious Court litigation regarding parenting arrangements for your children. You submit a number of Affidavits to the Court setting out your evidence, essentially your version of events, what took place during your relationship, what has happened since separation and why you think your proposal is the best arrangement for your children. But it’s all okay – these are not public records and your children, family and friends will never know what is in these documents…right? Unfortunately not.

Rule 24.13 of the Family Law Rules 2004 provides that particular persons may search a Court record relating to a case and inspect and copy a document from those records. As you might expect, parties to a case and/or their lawyers are entitled to inspect the records, however the rule also provides that the Court may permit a person with a proper interest in the case, or in information obtainable from the court record in the case to inspect.

Who is a person with a proper interest? There is no set criteria or class of persons who automatically fall into this category. It is a matter for the Court to determine on a case by case basis. In previous cases, the following have been deemed a person with a proper interest:

• A new or former spouse of a party
• The other parent of children from a different relationship
• The Commissioner of Taxation
• The Commissioner of Police
• A fellow director and shareholder of a spouse’s entity

If the Court determines the person is one with a proper interest, then in considering whether to give the permission to access the records, the Court must also consider the following:

• The purpose for which access is sought
• Whether the access sought is reasonable for that purpose
• The need for security of court personnel, parties, children and witnesses
• Any limits or conditions that should be imposed on access to, or use of the court record

In a recent decision of Carter & Carter[1] the Full Court of the Family Court permitted an adult child to inspect the Court file (which means all of the documents filed on behalf of any party to the proceedings) relating to his parents’ divorce and their contested parenting proceedings following their separation in 1976. When his parents first separated, Carter and his siblings lived with their mother. A few years later, Carter went to live with his father and his siblings remained with his mother. Carter wanted to better understand why those arrangements were made and why he was separated from his siblings. He had many questions which he thought could be answered from the court records, and also that if he had this understanding it may help with treatment and recovery of his mental illness.

Initially a Registrar of the Court refused Carter’s request, noting he did not have his parents’ consent to access the records. Carter appealed that decision. A Judge then ordered that Carter’s parents be notified of the case. Despite their estrangement, Carter’s parents subsequently consented to their son accessing the court records. However, consent of the parties to the case is only one factor for consideration, and it is ultimately a matter for the Court to grant permission.

The Judge decided Carter was a person with a proper interest, however only permitted Carter to inspect (not copy) the final consent orders (agreement) ultimately entered into between his parents, not all documents filed in the proceedings as he had sought. The Judge expressed concerns about:

• the benefit Carter would obtain from inspecting the file and that it was unlikely an inspection would provide the answers he was seeking (the Judge had already inspected the contents of the file);
• the impact the inspection might have on Carter’s mental health and wellbeing;
• the impact on Carter’s other siblings and his parents given the existing difficulties between the family; and
• the privacy to which the other family members were entitled.

Carter was not content with the Judge’s decision and appealed to the Full Court. On appeal, the Full Court determined that once a Court finds a person has a proper interest, the ultimate question is whether the access is reasonable, not whether the person will benefit from the access, and that Carter’s purpose for wanting to access the file was reasonable. One of the Judges of the Full Court also considered that “the question of whether children, who were the subject of proceedings and who are now well and truly adults, should be able to see what was said about them in respect of their best interests in proceedings which had that issue at their very heart, also involves an issue of principle”[2].

The effect of parental conflict and acrimonious litigation between parents can have a very serious impact on children, both at that time and later on in life. Carter was not the first and is unlikely to be the last child who seeks to inspect his parents’ file, looking for answers. Whether any future applications will be granted will depend entirely upon their circumstances and the discretion of the Judge. However, what does this mean for separating parents? How can you avoid details of your parenting dispute being revealed to your children into the future?

If you are involved in Court proceedings, be mindful of what is contained in your Affidavit or what you might say to a report writer. It can be easy, during a stressful and emotional time in your life, to make nasty and hurtful comments about your ex, or depict a version of events in your favour. However before you do this, take a step back and think about whether you would want your children’s happiness and wellbeing or your relationship with them compromised in 10, 20 or 30 years as a result of your children being able to read what their parents said about one another or about them all those years ago.

At Rostron Carlyle Rojas Lawyers we pride ourselves on assisting our clients and their former spouses to reach a resolution of their parenting matters without resorting to litigation in the Court. Outcomes that can be reached as a result of negotiations, family dispute resolution, counselling, family therapy and mediation involve less conflict between parents and often result in more child-focussed arrangements and a healthy co-parenting relationship between parents into the future.

If you require family law advice, please contact Renée Kinman, Senior Associate and Accredited Family Law Specialist on (07) 3009 8444 or [email protected] to arrange an initial consultation.

[1] [2018] FamCAFC 45

[2] Per Murphy J at paragraph 63

In the 21st century, social media has evolved into a fundamental pillar of communication. It has revolutionised the way we do business, the way we find and share information and the way we engage with friends and family. Not surprisingly, social media is now also recognised as having an impact on the outcome of legal proceedings.

What Is Social Media?

Social media refers to the means of interactions among people in which they create, share and exchange information and ideas in virtual communities and networks.  These technologies or platforms take on many different forms and can include Internet forums, blogs, social networks, podcasts, video search engines and more.

How Does Social Media Affect Courtroom Decisions?

Many agree that social media has played a vital role in allowing the democratisation of the internet. But despite these advantages, online social media also presents a unique set of challenges for the legal profession. Social media can significantly impact decisions made in a courtroom.

Generally, any postings online should be considered the same as email or text messages. Social media evidence can include photographs, status updates, people’s location at a certain time and direct communications to a person’s social media accounts.  This information can be used as evidence in court.  For example, in family law cases, derogatory comments posted about your ex-partner in custody cases, can be tendered in court to reveal your attitude and true feelings about the other person and used to contradict your sworn evidence.

Social media is impacting many areas of the law from workplace relations to defamation cases. It is a lawyer’s responsibility to understand what these impacts are in order to be able to provide a comprehensive service to their clients.

Rostron Carlyle Rojas team of experienced family lawyers can advise you on your social media rights and responsibilities. They combine years of experience with a genuine passion for helping protect the rights of their clients. For more information about how social media can impact the outcome of your family law case, contact them today on (07) 3009 8444.

The Family Court of Australia does not regard the efforts of a spouse in building up a substantial business during a marriage or relationship as being any more important, significant or special in the determination of the split of the family assets.

The efforts of the other spouse who may have contributed to the relationship and the welfare of the family are considered in a different, but no less important, way by undertaking the role of home maker and parent who does the domestics and raises the kids.

In every case, the contributions and circumstances of each party must be carefully considered and assessed. All of the contributions made by each spouse are important in working out a fair split, so are the current financial and other circumstances of each party and their future needs arising out of their ending of the relationship.

However, the law makes it clear that the spouse who contributes all or most of the money or pays for the assets of the family through their business efforts (even in terms of million dollar or multi-million dollar incomes, assets and lifestyles) is not thereby entitled merely by that fact to any greater share of the family assets than the homemaker who raises the kids.

Rich and successful spouses often argue that “without my hard work, we would’ve had nothing” as a basis to contend that they should receive the lion’s share of the assets and the other spouse should get nothing or next to nothing for their efforts on the home front. This argument will not impress the Court.

To ensure that you get a fair and proper share of what has to be divided up when you separate, you should talk to one of our family law team members.