Financial impacts of COVID-19 on family law property settlements
The coronavirus (COVID-19) has triggered a domino effect on the world as we knew it, causing many of us to reconsider current and future plans. For those involved in a family law property settlement, it presents issues that may now need to be considered or revisited.
Whether you have just started negotiations, are in the middle of court proceedings, or are close to reaching or finalising a property settlement, the effects of COVID-19 will likely require attention in your family law matter.
Family courts arrangements
The Family Court of Australia and Federal Circuit Court of Australia (‘the Courts’) continue to operate but have made significant changes to their processes. How the Courts continue to function may continue to change as the situation evolves.
If you have a matter in court, it is important to stay in touch with your lawyer, or the Court itself if you are not legally represented, to see how the changes affect you.
Presently, will be conducted through both electronic/telephonic means, as well as face to face hearings for which strict in-court protocol to manage risk will be maintained.
Most court hearings and events will be by telephone or video conferencing, with some non-urgent matters to be postponed.
Documents will be filed electronically, and registry services will be primarily provided remotely by telephone or online.
Valuation of assets for property settlements
An essential step required in negotiating a family law property settlement is to identify the assets, liabilities and financial resources of the parties. Assets include real estate, motor vehicles, investments, cash, shares, insurance, business interests and superannuation. This information provides the ‘asset pool’ from which a property division between the parties may be negotiated.
COVID-19 has, and will likely continue to have, a profound effect on the value of a range of assets. The pandemic has created volatility across global markets and shares in publicly listed companies have been impacted with a flow-on effect to superannuation interests invested across shares and other various assets.
Numerous businesses are affected and (whether from government direction or other causes such as supply shortages) have either temporarily or permanently closed or reduced their operations. Previous values placed on a business, the subject of a family law property settlement will no doubt be affected and may need to be reconsidered.
When discussing how best to proceed with your lawyer, it would be prudent to consider how the current crisis may alter how you move forward with your matter.
Financial resources and child and spousal maintenance
Changes in personal financial circumstances may result in parties responsible for paying or receiving child or spousal maintenance to seek a reduction or increase in payments.
It is important to remember that any orders previously made remain in full force and effect unless varied or discharged by the Court.
Bankruptcy and corporate insolvency issues
Many individuals and companies face an increased risk of insolvency due to the economic challenges COVID-19 has presented. This raises significant and complex issues in a pending family law property settlement .
Parties facing, or whose former partner’s face, the risk of insolvency should obtain urgent advice.
What to do next?
If negotiations are on foot and you have not finalised a property settlement, you should speak to your lawyer about reconsidering the value of certain assets affected by these recent events.
If you have finalised a property settlement, the value and terms of which have been significantly impacted to your detriment, you should talk to your lawyer or, if you are unrepresented, seek urgent legal advice.
Now, more than ever, is the time to consider settling your family law matter out of court. Alternative dispute resolution methods such as mediation and negotiation are useful tools under the guidance of an experienced professional.
Any agreement that is reached outside of Court can still be formalised by way of submitting an Application for Consent Orders, or if your matter is already in Court by sending a joint letter to the Judge’s Chambers for consideration.
It is important to note that the time limits within which to commence proceedings for a family law financial property settlement have not been affected.
To address the potential economic impact of the coronavirus the Federal Government has declared several financial measures to support businesses and assist families and individuals throughout this crisis.
The circumstances we face are unique. Directions issued and measures introduced to address the many complications of COVID-19 are constantly evolving. We urge you to keep up to date with developments by closely monitoring reliable sources of information.
We are here to help across all aspects of your family law matter.
This article is intended to provide general information only. You should obtain professional advice before you undertake any course of action.
If you or someone you know wants more information or needs help or advice, please contact us on 03 8415 5600 or email firstname.lastname@example.org.