Bowen Buchbinder Vilensky

Archive for June, 2014

You’ve Told Him It’s Over… Now What?
Wednesday, June 25th, 2014

PatS

By Patricia Schrape, Associate at Bowen Buchbinder Vilensky Lawyers

25 June 2014

Whether it comes out of the blue for one of you, or you’ve both been avoiding the elephant in the room that is your broken relationship for months or years on end, the moment when it is finally acknowledged that the end is here can be a mighty big relief.

But what to do to extricate two separate lives from one which has been forged jointly?

If you haven’t done so prior, you should strongly consider getting confidential legal advice from an experienced family lawyer. Seeing a lawyer doesn’t mean you are committed to anything, and in most cases should be able to provide you with a good idea of what is ahead of you and what your rights and entitlements may be.

Obviously every couple have factors which will be more or less pressing, and the degree of animosity will determine how urgently action needs to be taken, but below are some things to keep in mind:

Finances/Property

  1. Think about joint bank or share trading accounts – if things are amicable, perhaps a broad discussion about usage will suffice. If there are accounts with significant funds, consider changing them so that both signatures are required to transact. Also consider each of you having your salary paid into accounts in your sole names, a first step towards practical financial independence;
  2. If you are living under the same roof for the time being, think about setting up a PO Box for your personal mail. If you’re moving out, be sure to redirect all of your mail;
  3. If you have a prolific online presence, be sure to change all of your passwords, even if you think your significant other doesn’t know them;
  4. Same with pin numbers for bank and credit cards;
  5. Cancel secondary credit cards if you suspect a vindictive shopping spree may be on the horizon. If possible, give a little notice before doing so to avoid their experiencing the embarrassment of a refused transaction and that embarrassment turning into wrath towards you;
  6. Change your Will to reflect your new circumstances, keeping in mind that unless the Will is drafted ‘in contemplation of a divorce’,  a Divorce Order will invalidate it;
  7. Contact your superannuation fund to change the nominated beneficiary for your super – superannuation does not form part of a deceased estate, so your Will can’t deal with it;
  8. Once your financial and property division has been agreed, be sure to have it legally documented so that all loose ends are tied up and everything is properly finalised. This can be done via Family Court Consent Orders or a Binding Financial Agreement.

Parenting

If you and your partner have children, this often introduces a whole other kind of complexity to the end of your relationship.

It is in everyone’s best interest to present a united front to the children, being supportive of them and each other as parents whilst you guide them through what will invariably be a big change in their lives. Try to agree with your partner on a routine, and stick to it.

Sometimes, however good the intentions, issues arise in relation to children.

There are numerous private and government agencies who provide counselling, mediation services and other helpful programs.

If things regarding the children look like they may become contentious, try to keep a record of arrangements – who they’re spending time with and for how long etc. In stressful times such as these, memory often falters.

Should the situation deteriorate, lawyers can assist in negotiating arrangements, and if necessary bring proceedings in the Family Court.

If the arrangements for the children are agreed, be sure to write them down clearly and concisely, so everyone is on the same page. You should seriously consider getting Family Court Consent Orders, which provide much greater certainty.

A final note on Facebook and social media. As much as your hundreds of friends and followers may happily provide support to you in this difficult time, it is usually best to stop altogether, or carefully limit usage. A tipsy posting about an estranged partner can all too easily get back to them and cause all manner of grief.

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Bowen Buchbinder Vilensky’s team of family lawyers is comprised of Partner Damien Bowen, Senior Associates Catriona Kilgallon and Sam Fahey, Associate Patricia Schrape and Solicitors Vince Bradley and Anna Westphal. You are welcome to telephone to make an appointment with any one of us.

 

What to Consider When Becoming a Mortgage Guarantor
Friday, June 13th, 2014

Craig pic

By Craig Hollett, Director at Bowen Buchbinder Vilensky Lawyers

13 June 2014

Rising house prices affect many of us directly and all of us indirectly.  In cases where the parents of grown-up children see their kids getting first jobs, starting out in life, and facing the seeming impossibility of buying even a modest unit, it’s only natural to want to help.

Those parents who can afford to, often help their kids with a loan, soft or otherwise.  A recent survey in the UK shows that 1 in every 4 first home buyers borrows money from family or friends to help secure a place on the property ladder.  Loans to your children should be properly documented to protect you if your child and their partner, current or future, later separate and a question arises about whether your loan was a loan or a gift in the division of their assets.

But many parents are not in a position to give their kids a major financial leg-up.  In cases like these, where Mum and Dad have little spare cash, but do have equity in the family home, they may think about standing as guarantor to help their kids get that vital first home loan.

While the motivation to help is well-understood, the consequences of being a guarantor are not always understood as well.  Here are a few suggestions of things to consider if you are thinking about becoming a guarantor:

  • Take independent legal advice first.  You need to know what exactly you’re getting into, your rights and the possible consequences for you if your child defaults on their loan.   You don’t want to be in the position of having paid your mortgage faithfully every month for decades, only to have the bailiffs coming round to seize goods, or your property, because your kids get into financial trouble.  You also need to know if and how you can be released from your guarantee in the future.
  • Be sure that you know whether the guarantee is for a capped amount or the full amount of the loan.  A partial guarantee reduces your risk, and may be all your kids need to get the loan.
  • Have an agreement with your kids that creates an escape clause for you so that if your kids start earning a lot more, and/or the value of the property rises, they agree to refinance, and remove you as guarantor.  Regularly review this situation with your kids, at least on an annual basis.
  • Promptly seek legal advice if your child and their partner separate and you are a guarantor on their loan. The last thing you want to do is find yourself still guarantor to a loan for a property inhabited by your child’s ex and their new partner!
  • If you do guarantee the loan, avoid putting a caveat on your  own property .  Even if your kids don’t get into trouble, a caveat could frustrate your own plans to downsize or sell later.
  • Make sure you accept the lender’s offer to receive copies of all correspondence and documentation to the borrower.  You don’t want to find out that your kids have fallen behind on their loan only months after the event when a process server knocks on your door and serves you with a writ of summons.

Remember, you are not the first parent to go down the path of being a guarantor for a child.  There are many factors to consider and a lawyer used to working with mortgages can help you reach a positive outcome – which includes your peace of mind!

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