When partners separate, one of the most painful issues is how to divide the assets and liabilities accumulated before, during and after the end of the relationship.
Adding to the complexity are questions around what you have to disclose to the other party about your financial position.
The Family Law Rules 2004 and the Federal Circuit Court Rules 2001 stipulate that parties in family law proceedings are to make “full and frank” financial disclosure to each other.
This means you must disclose all aspects of your financial position regardless of the other party’s previous knowledge of or involvement in your financial matters.
The obligation under the Family Law Rules to make financial disclosure applies whether the property, financial resources or earnings are owned by you, come to you directly, or go to some other person or beneficiary.
You must also disclose interests that you hold jointly with any other person including property or interests in property that are held by you and your former spouse or de facto partner together.
In practice, “full and frank financial disclosure” means you are required to provide all information and documents in your control or possession that evidence your financial position and net worth.
One judge commented that this is an obligation of “show & tell” not “hide & seek”.
This includes, but is not limited to documents and information in relation to your:
- Personal or business income
- Pension or superannuation funds
- Financial resources including child support, trusts or other payments
- Business holdings
- Investment holdings
- Real property
- Vehicles and watercraft
- Winnings, inheritances, compensation, payouts or claims
- Other assets in your control or possession
- Debts and liabilities
Additionally, Family Law Rules act requires you to disclose all information about property that has been disposed of by you – or with your authority or permission whether by sale, transfer, assignment or gift – that occurred in the year immediately before your separation.
If you do not disclose all matters relevant to your financial position and/or you attempt to put assets out of the reach of the Court or the property settlement, then the Court has the power to reverse various transactions or impose serious penalties for your conduct, including:
- Awarding a greater portion of the property pool to your spouse or partner as compensation
- Making an Order that you pay your spouse or partner’s legal costs
- Finding that you are guilty of contempt of Court, and imposing a fine or a term of imprisonment