Often, a trusted accountant can be the first person someone speaks to when a family law problem arises. Beyond that point however there remains a significant role that can be played by accountants as the family law matter progresses.
The majority of separated partners utilise private mediation or participate in mediation within the Court process in an endeavour to work through a practical agreement to resolve their property and other financial issues.
When it comes to property, while the possible terms of a Court imposed and ordered property determination are limited, that is not the case where the parties can reach their own agreement.
With the popularity of self managed super funds and prevalence of small to medium businesses, lawyers are looking for assistance from accountants, (either as a single expert) or the trusted family accountant to help construct the terms of the family law property agreement.
An agreement which has arisen from negotiations can include more flexible terms that are more suited to the particular individuals to the agreement. This is particularly the case in family law financial matters.
Where the terms are the subject of negotiations, rather than a Court imposed outcome, there are many more options and a level of flexibility as to what that agreement may “look like” and provide for.
An accountant’s input is invaluable in assisting in the drafting the terms of the agreement.
The accountant and or financial adviser can assist with and advise on;
- Who should be a party to the agreement? Should the family company or the trustee of the Family Trust be joined to the proceedings and therefore the terms?
- What balance should there be in a distribution of superannuation and non superannuation assets between the parties?
- If one party is closer to retirement and there are limited cash resources available, then a greater share of the superannuation assets being allocated to the retiring party may assist in one party being able to financially retain a property to live in. It may be the case that otherwise where there is not a great deal of capital to go around, the retention of the real estate may not be open to them as a viable option.
- In the case of a self managed super fund, an accountant’s input can be required where the assets of the fund are such that the parties need to consider which assets of the fund are to be distributed to which parties
- Where there are CGT implications arising from the agreement, the accountant can assist in the timing of the implementation of the agreement.
- An accountant can assist with an understanding as to whether the Order provide for a distribution of funds across a number of financial years?
- Whether there are any unintended tax consequences of the Orders and if so whether there are options to deal with them.
- What are the tax consequences of implementation of the agreement of the parties or the anticipated Orders of the Court?
- If the tax impost of some kind is inevitable, then the accountant will help to quantity the liability so that it is equitably shared between the parties.
- Where there are a number of corporate entities involved, the input of the accountant as to practical implication of the agreement is invaluable.
For many of our clients we involve the accountant in the settlement process and provide to the accountant from time to time the draft of the proposed agreement so that the accountant can provide this advice.
This is also important as it will often be that accountant who will need to implement the Orders once they have been made.
One of the most helpful aspects of involving the accountant in this process is that they can put in clear terms accounting aspects and concepts that need to be considered in the process, identifying and explaining entries in the balance sheet for us non accountants!
Contact Us
For further information contact one of our Family Lawyers at Matthews Folbigg on 9635 7966
