The COVID-19 pandemic has had a massive domino effect on almost every aspect of life, one of which includes Family Law property settlements. Whether you have only recently started negotiations, are in the middle of Court proceedings or even at the end of your family law journey, it is safe to say that COVID-19 has more than thrown a monkey wrench into many people’s plans. Today, we have a look at how the virus has impacted Family Law property settlements and beyond, so be sure to take note if you are currently dealing with any of the circumstances we touch on. Read on to find out more!
Valuation Of Assets For Property Settlement
Property settlements in these unprecedented times have truly taken a hit, thus affecting the lives of families all around Australia. A vital step that is required in negotiating a Family Law property settlements is the identification of assets, liabilities and financial resources of both parties involved. These assets include real estate, vehicles, cash, shares, investments and superannuation. It is only by assessing this asset pool that property division between the parties may be negotiated.
Unfortunately, COVID-19 has had a profound effect on the value of a wide variety of assets, with the biggest impact falling on property values on a global scale. Previous values placed on a property are in most cases now considered overvalued, thus creating a situation in which property settlement is deemed unfair by the time of executing the court order due a sudden drop in value.
Another factor that has taken a hit due to the pandemic is superannuation values. Due to this, it is incredibly important that parties obtain updated superannuation member entitlements and share prices to ensure that your asset pool is up to date and not under or overvalued. In the current climate, it may even be appropriate to negotiate a superannuation split based on a percentage division as opposed to one calculated off a base amount in order to take into account the volatility that currently exists in the market.
It is important to note that if you are considering early access to your superannuation, it still remains uncertain as to whether the courts will consider the early release as an ‘add back’ into the parties’ property pool of assets.
Family Maintenance and Child Support
With job security at an all time low, many people all around Australia have been experiencing lower income due to the loss of a job or reduced hours of work. If you find yourself in this predicament, it is highly advised that you contact the Department of Health and Human Services (DHHS) for a reassessment of your child support obligations. Do note that unless you are proactive in contacting the DHS, your child support obligations will remain the same, regardless of your change in income.
Failure to comply with your child support obligations will result in the accumulation of arrears and may attract hefty penalties. In terms of spousal maintenance, the DHS also takes into account each party’s income and their capacity to meet their own expenses. Parties may also be required to contribute to any deficit in the other party’s capacity to meet their reasonable expenses.
Now more than ever, it is vital that you seek legal, expert and independent financial advice in relation to family law property settlement, superannuation splitting orders and any other factors that may affect your family law court proceedings and orders. You can reach our expert team of family lawyers by calling (03) 9670 7577 or by simply sending us an email at firstname.lastname@example.org.