The Bank of Mum and Dad Needs A Paper Trail

The Australian Financial Review recently reported (8-9 May 2021) that parents are now among the nations’ top 10 lenders for home loans with data showing more than 60% of first home buyers are receiving assistance from their parents to purchase their first home.

Unsurprisingly with the world in the middle of a pandemic and the economy in recession, now more than ever, children are turning to their parents for financial assistance. It is incredibly important that prior to parents providing financial assistance to children, parents must first be clear on whether the assistance is to take the form of a gift or loan.

The distinction between the financial assistance provided being a gift or loan becomes incredibly important in the following scenarios:

  • the child’s relationship breaks down and their spouse alleges that the financial assistance was a gift rather than a loan;
  • the parents pass away and their Executor is left to determine whether or not the financial assistance is to be repaid to the Estate;
  • a sibling makes a claim for further provision from the parents’ Estate on the basis that the child has already received financial assistance during their lifetime;
  • the child becomes bankrupt and the trustee in bankruptcy classes the financial assistance as an asset as opposed to a liability;
  • the relationship between the parents and child breaks down;
  • the parents are receiving a Centrelink pension which may be affected by providing the financial assistance to the child.

In the above scenarios, it is generally the parents or their Executor who bear the onus of proving that the financial assistance was a loan rather than a gift. Often the only written evidence available is the bank transfer, with the only other evidence being verbal communications resulting in a “he said, she said” argument.

Disputes of this nature can so easily be avoided by first consulting with a Solicitor to create a paper trail and have a properly prepared and executed loan agreement in place.

If you or someone you know of are considering providing financial assistance to a child or any other person, please contact our office to make an appointment to meet with one of our experienced Solicitors. We are also able to advise on any existing arrangements that have not yet been documented. 

Family Law: Lawyers and the Bank of Mum and Dad

laywer with couple and paperwork

Why is it important to know about Lawyers & the Bank of Mum and Dad? The Australian Financial Review reported (8-9 May 2021) that parents are now among the nations’ top 10 lenders for home loans.  Remarkably, data shows more than 60% of first home buyers are getting assistance from their parents to get into their first home.

How should the families concerned, mum and dad and their adult child and possibly their child’s partner, document such financial assistance?

Binding Financial Agreement (BFA)

What about a Binding Financial Agreement (BFA) for the happy couple, each requiring their own separate lawyer for advice? Another newspaper (The Australian) the same weekend carried comment from family lawyers recommending BFAs where there are Mum and Dad loans.   

A BFA might provide that in the event of a separation of the couple, the loan from Mum and Dad be repaid, or not, and by whom, but is a BFA is the right solution?    

Remarkably, no one knows how successful BFAs are for most couples.  There is no record of the numbers of BFAs done in Australia. The University of Sydney (UTS) has in April 2021 Family Law Section Newsletter invited lawyers to take part in a project involving academics from several universities to gather data and report about BFAs.   

In the 20 plus years since BFAs were first permitted there has been significant litigation between the couples to the BFA and sometimes including their lawyers, that ironically BFAs are intended to prevent.    

A more immediate solution could be a formal contract between the Bank of Mum and Dad and their adult child and possibly their child’s partner, as to the terms of the loan.  Some of the loans will be ‘gifts’ and/or required to be gifted as part of the deposit requirements for the primary housing loan, so what happens then? On any basis, financial planning and legal advice should be considered by all parties.  

Our Family Law team at Bowen Buchbinder Vilensky has the skills to assist our clients to negotiate this complex system and navigate through Lawyers & the Bank of Mum and Dad. 

To book an initial consultation with one of our experienced family lawyers, please get in touch. Alternatively, to get started online now, visit the BBV Legal Online System where you can enter your relationship details and receive information that is free, instant, personalised and helpful.

When Does Your Resignation As A Director Become Effective?

Can A Director’s Resignation Be Backdated?

There are over 2000 laws and regulations in Australia that impose personal liabilities on Directors of both private and public companies.  These laws and regulations range across areas as diverse as taxation, superannuation, occupational health and safety, insolvency and consumer law.

For these reasons, it is important that when a person resigns as a Director of a company for whatever reason, such resignation is done properly in order to be effective.  Failing which a Director can remain personally liable for a range of obligations and liabilities even after they believe they have resigned their position.

Recent amendments to the Corporations Act which came into effect on 18 February 2021 have put into sharp focus the need for resigning Directors to ensure that the appropriate paperwork is prepared and that the Australian Securities and Investments Commission (ASIC) is properly and promptly notified. 

Under the recent amendments a Director’s resignation will now take effect on:

  • The date that the person ceased to be Director (which requires a formal letter of resignation) if ASIC receives notice of the resignation within 28 days of it occurring; or
    • The date the notice is received by ASIC, if ASIC receives notice of the resignation more than 28 days after it has occurred.

It is also worth noting that if the resignation of a Director will leave the company without at least one Director it will not take effect.

When a Director resigns the company is required to notify ASIC within 28 days of the resignation occurring.  This is done by filing with ASIC an appropriate Form 484 which can be completed online.  This is normally attended to by the company secretary or the external accountants of the company.  Prior to the amendments coming into effect, if the company failed to lodge the notification with ASIC within 28 days it was liable only to pay a late lodgement penalty, however, the resignation was still effective from the date of the letter of resignation irrespective of when ASIC was formally notified. 

Now, a resignation as a Director will not take effect unless and until ASIC is notified.  This prevents the improper backdating of Director resignations and ensures companies are not improperly left without Directors. 

Importantly, persons who resign as Directors remain exposed to liability after their resignations unless ASIC are notified within 28 days.  Until ASIC are notified the Director resignation is not effective and the exposure continues.

For these reasons the importance of proper company processes which include the prompt notification to ASIC cannot be underestimated.

For professional advice from our team of Commercial Lawyers in Perth, please contact David Vilensky, Les Buchbinder or Alana Shaddick on 9325 9644.

AMICA – Can A.I Replace Family Lawyers?

Amica is a new initiative supported by the Australian Government. It is designed to assist couples to resolve their parenting and/or financial issues following separation. It is a great initiative for couples who can “get along” as they come apart.  For others, it is less helpful.

According to the website, Amica:

  • provides separating couples with a user-friendly platform to work out and record parenting arrangements that work for their family.
  • uses artificial intelligence to make suggestions about dividing money and property (considering legal principles) based on the information that is entered by the parties.

The website claims that Amica “should suit most separating couples”.  These are some of the situations listed where Amica is not going to be suitable:

  • There is a Family Violence Restraining Order in place between the parties.
  • A limitation period will expire in the next 3 months.
  • There is a genuine dispute about the validity of the relationship.
  • One of the parties to a relationship or marriage is on a visa or seeking a visa which is dependent on their relationship with their partner.
  • There are any existing court orders in place about parenting arrangements for any children of the relationship.
  • There are ongoing cases or allegations in any court involving family law, child support, family violence or child welfare that involve either parent, or a child of the relationship.
  • One of the parties wishes to relocate with a child of the relationship.
  • Either party wishes to divide superannuation.
  • There are any genuine disputes over what is included in the property pool.
  • Any property of the relationship has been disposed of (such as sold or transferred) without consent of both parties.
  • There are caveats or charges lodged over any property in the property pool.
  • Assets in the property pool are held in a company or trust.
  • One party is a director of a company that forms part of the property pool.
  • Where either party owns or partly owns property or other assets overseas.
  • The property pool includes property which is also owned by a third party.
  • Either party currently has bankruptcy proceedings against them, or if either party was bankrupt during the relationship, or if either party is an undischarged bankrupt.

While Amica appears to be a great initiative, it is not the end of family lawyers by AI.  Amica does not give legal advice. In our experience, it is very rare to encounter a matter which does not involve at least one of the complicating factors listed above, making Amica unsuitable for most separating couples.

Importantly, even if a separating couple can reach agreement using Amica, it is not legally binding. All information exchanged between parties is done so on a “without prejudice” basis, meaning the information disclosed via Amica cannot be used in Court proceedings.  

Here at Bowen Buchbinder Vilensky, we encourage our clients to reach an amicable resolution to their family law issue, whether it be divorce, parenting arrangements or property division.

To book an initial consultation with one of our experienced family lawyers, please get in touch. Alternatively, to get started online now, visit the BBV Legal Online System where you can enter your relationship details and receive information that is free, instant, personalised and helpful.

Family Law: A Complex And Private Legal System

lawyer with couple at desk

In Australia all separating couples, are subject to a family law system that is both “bifurcated” and private. 

We can read about Angelina Jolie and Brad Pitt’s divorce and separation process in the media, and learn that in California Angelina and Brad are subject to a “bifurcated” legal system. But you will not usually learn details about local celebrities’ divorce settlements.

The fact of a separation or divorce and general details can be published but that is because it is not about family court litigation or “proceedings”.  

Section 121 of the Australian Family Law Act makes it an offence to publish details of separating couples’ court cases.    

Sometimes when media outlets have sought permission, the Court grants leave for the publication of details concerning a case, or the Court itself directs publication when pseudonyms rather than the real names of the parties are used.  On other occasions, real names are necessary, for example, if there is a missing child.

The embargo on publication means not only can details about a family law case NOT be published in the media but also NOT on social media. 

A bifurcated divorce in California means “they are legally divorced, but are yet to decide on child custody and financial arrangements”.

In Australia, the Family Law Act provides that a person can apply to the court (or negotiate a settlement without going to court) as soon as they separate, but can only apply for a divorce after 12 months has run.

That is how a bifurcated system operates, where the processes are separated into separate branches or parts.  In Australia there are three parts to the system, including a separate child support system.

Services Australia Child Support decides financial obligations for children after separation, separately from Family Court property settlement and spousal maintenance.  Spousal maintenance (rarely used in the 21st Century) is usually resolved at the same time as property settlement. Spousal maintenance can be obtained and very rarely, after property settlement.

Divorce (the right to remarry without committing bigamy) often follows later, after the hard work of financial settlement and arrangements for the children has been done. 

This complicated system is private, to protect the individuals and families involved. 

People can take steps and make decisions or seek legal process to assist them, using those parts of the system that they need at that time.  But there are pitfalls that require experience and expertise in family law to negotiate.

The confidentiality of the system means that general public knowledge of family law in Australia is limited, scattered and often ill informed.

Our team at Bowen Buchbinder Vilensky has the skills to assist our clients to negotiate this complex system as best suits them.   

Avoid Being a “Botched” Victim When It Comes to Family Law Advice

Frustrated couple refusing to sign contact containing 'botched' family law advice

I do not know whether you have had the fortune, or misfortune as the case may be, to watch an episode of the reality TV show “Botched”. 

“Botched” follows the daily professional lives of 2 plastic surgeons in Beverly Hills who specialise in fixing up botched jobs done by less experienced and incompetent plastic surgeons.  In other words, all of their patients are former patients of other plastic surgeons and many are disfigured from procedures that have gone horribly wrong.  Hence the title of the reality show.

“Botched” reminds me of the family law practice of Bowen Buchbinder Vilensky (“BBV”).  Many of our clients have been the clients of sometimes, two or even three, other law firms before they eventually end up at BBV.  By the time these new clients come to our experienced and competent family law team, they are very often demoralised, low on funds and have completely lost faith in the legal system insofar as it relates to family law matters.

The lesson for potential clients seeking advice in family law is to avoid being a “Botched” victim.  That is, get good quality advice early in the process from experienced and competent family law lawyers who understand the process and will point you in the right direction from the outset.  This is a specialty of BBV.  The financial benefits of being in good hands early cannot be overestimated.

Put simply, start with the right family law lawyer to avoid having to change lawyers midstream to unwind bad legal or strategic advice provided by inexperienced lawyers.  Avoid wasting time and resources on bad legal advice.

As managing director, I could not be prouder of the family law team working at BBV.  I observe them at work every day.  They are ethical, experienced, passionate, empathetic and highly competent.  Further, they will work on a fixed fee basis so that clients know in advance what fees will be incurred. 

May I share with you a very recent testimonial provided by a satisfied client of the firm on whose behalf we concluded a rather complex family law matter:

            “You and your firm have been my saviour when it comes to sailing the treacherous waters of divorce, consent orders and paperwork. I cannot thank you enough for your advice, thoroughness and organisation. You were understanding, compassionate and have amazing patience.

Words cannot explain my feelings and I am forever thankful.”

If the producers of “Botched” were looking to do a similar series based on the legal profession, they could use the family law team at BBV as the practitioners fixing up the botched jobs caused by less experienced lawyers.

PLEASE CONTACT

If you would like advice in this area please contact David Vilensky at [email protected] 

Share on facebook
Share on linkedin
Share on email

Too Bad To Stay, Too Good To Leave

Upset couple sitting separately as they consider separating

The media has been reporting that couples have found the Covid-19 impact hard on their relationships.  Others might have found that there has been an improvement in some ways, because they have endured unexpected challenges together.   In Western Australia at least, we seem to be coming out the other side.

Pandemic or no pandemic, you might be unsure about whether your relationship is “good enough”. 

As family lawyers, we often see clients who did not see separation coming.  When that happens without any warning, that can be most devastating.

Other clients come for legal advice before they have separated, when they are still living “under the same roof”. In those circumstances we can help at the front end and give advice that can potentially benefit everyone involved, while our first duty is to our client.

Separating does not increase what you have to share between you.  In fact, assets can be depleted because costs which were previously shared such as mortgage payments or rent and utility bills, are now payable for two residences. However, if you can reach an “amicable” settlement you will spend the money that has to be spent to sort things out and no more.

Only you can decide if you should stay in a relationship.  Despite what is said sometimes in the media about people not regarding their marriage vows with the seriousness that they were taken in the past, our experience is that none of our clients have come to consider ending their relationship lightly. 

Usually by the time a client decides to see a lawyer they have spent time beforehand deciding that this is what they must do. 

A useful book that is readily available that a person unsure about their relationship might find useful to read (and there are others) is Too Good to Leave Too Bad to Stay by Mira Kirstenbaum.  It was published some years ago and is a little dated but many people say they have found the approach that it provides to be useful.  Reading a “self-help” book can be invaluable, but it is not a substitute for professional help about relationships.

If you are ready to take the step but still unsure, getting professional advice, concerning your relationship and also legal advice, is likely to be very much in your interests.   

At Bowen Buchbinder Vilensky a first appointment without any obligation to proceed further costs $440 including GST. 

PLEASE CONTACT

If you would like advice in this area please contact Rhonda Griffiths at [email protected] 

Share on facebook
Share on linkedin
Share on email

Separation Under One Roof

Frustrated couple experiencing 'separation under one roof'

Thanks in large part to the COVID-19 pandemic, the Western Australian economy is expected to experience a recession in the 2021 financial year.

With increased unemployment rates, and house prices falling over the last 5 years,[1] there will likely be an increasing number of newly separated couples who will have little choice financially but to remain “separated under one roof”, at least for a time.

 

Why Does the Date of Separation Matter?

The date of separation between a couple can be relevant for several reasons. 

For de facto couples, it can be the difference between the Family Court of Western Australia having, or not having, jurisdiction to make orders for property adjustment and maintenance.  For the Court to have such jurisdiction, it is generally a requirement that the de facto relationship has existed for 2 years.[2] 

It is also relevant to the limitation period for de facto couples, who generally must commence proceedings in the Family Court within 2 years after their relationship ends.[3]

For married couples, a divorce can only be granted where the marriage has irretrievably broken down.  To show that the marriage has irretrievably broken down, the parties must have separated and lived separately and apart for a continuous period of at least 12 months, immediately before filing the application for divorce.[4]

 

Separation Under One Roof

Section 49 of the Family Law Act 1975 (Cth), which applies to married couples, provides as follows:

  • The parties to a marriage may be held to have separated notwithstanding that the cohabitation was brought to an end by the action or conduct of only one of the parties.
  • The parties to a marriage may be held to have separated and to have lived separately and apart notwithstanding that they have continued to reside in the same residence or that either party has rendered some household services to the other.

 

Are We Separated?

Whether there has been a separation under one roof will be a question of fact which is decided on the facts of each case.  As with many areas of law, it is not black and white, and the circumstances of each individual relationship will be considered.

For separation to occur between a married couple, one or both spouses must form an intention to sever and not resume the marital relationship, and act on that intention.[5]

The body of case law involving separation under one roof indicates that a comparison of the state of the relationship before and after the alleged separation may be required.[6]  The following factors may be relevant (to both married and de facto couples) in such an analysis:

  1. Whether one or both of the parties communicated to each other that they considered themselves to be separated.
  2. Whether the parties have continued to share a bedroom, and the extent to which any sexual relationship has been maintained.
  3. Any change in the financial relationship between the parties, for example the closure of joint bank accounts.
  4. How and when the separation was communicated to friends and family of the parties, and whether the parties have continued to hold themselves out to be a couple.
  5. A reduction in shared activities.
  6. The extent to which the parties have continued to perform domestic chores for the benefit of the other, such as cooking, cleaning, and laundry.
  7. The reason why the parties have remained residing under the same roof (e.g. financial pressures).
  8. Whether any government departments, such as Centrelink, have been informed about the separation.

 

What Next

If you consider yourself to be separated under one roof and require legal advice as to divorce, property settlement or parenting matters, please contact Bowen Buchbinder Vilensky for an initial consultation.

 

Disclaimer:  This article is intended to provide general information only and does not constitute legal advice. The article is in summary form and we recommend you seek legal advice or other professional advice as to whether and or how the information is applicable to your circumstances.

[1] https://reiwa.com.au/uploadedfiles/public/content/the_wa_market/house-prices-2013-web.pdf

[2] Family Court Act 1997 s 205Z(1)(a)

[3] Family Court Act 1997 s 205ZB(1)

[4] Family Law Act 1975 s 48(2). See also s 50(1).

[5] Pavey & Pavey (1976) FLC ¶90-051, citing Todd & Todd (1976) FLC ¶90-008.

[6] Todd & Todd (1976) FLC ¶90-008

PLEASE CONTACT

If you would like advice in this area please contact Kori O’Meehan at [email protected]
Share on facebook
Share on linkedin
Share on email

My property and income have been affected by COVID-19

Woman investigating how property and income have been affected by COVID-19

Disclaimer:  This series of articles is intended to provide general information only and does not constitute legal advice. The article is in summary form and we recommend you seek legal advice or other professional advice as to whether and or how the information in applicable to your circumstances. The information in this article was current at the time of publication, however it may no longer be applicable.

Family Law COVID-19 FAQ’s: Part Three

My property and income have been affected by COVID-19, will this impact my Family Law matter?

Many industries, investments, and businesses have been negatively affected by COVID.

If your financial circumstances have significantly changed this will impact your matter.

When reaching a financial property settlement, the law requires consideration of each parties’ future needs and earning capacity.

If you are temporarily unable to work or your business is not as profitable as it once was due to COVID this may not necessarily affect your earning capacity in the future. However, it may affect your future needs if your investments, assets, or savings have been depleted as a result and will in any event impact your financial property settlement.

Can I access support and maintenance in light of COVID-19?

Other than receiving increased support through changes to your anticipated property settlement you may also have relief available to you by way of spousal maintenance or child support orders.

If you were not previously receiving any spousal maintenance or child support, but now have reduced income as a result of COVID, where your partner does not have reduced income you may be able to seek support. If you were receiving maintenance or support but it is no longer enough due to your reduced income, it may be possible to vary your maintenance or support terms, depending on the circumstances of the other party.

In the alternative, if you were already paying spousal maintenance or child support but your own income has now been reduced, you will likely be able to vary the terms of the agreement to reflect your current circumstances.

If you cannot vary terms or seek support by agreement you may need to make an application to the Court.

Family law is a complex area which requires consideration of relevant time limits, needs, and financial circumstances of each party and therefore it is always recommended that you obtain legal advice before making an application to the Court.

Please contact us at [email protected] if you have any queries in relation to the above answers or if you wish to discuss the impact of COVID-19 on your family law matter further.

Disclaimer:  This article is intended to provide general information only and does not constitute legal advice. The article is in summary form and we recommend you seek legal advice or other professional advice as to whether and or how the information in applicable to your circumstances. The information in this article was current at the time of publication, however it may no longer be applicable.

Is my child in breach of social distancing requirements at the other parent’s home?

Young child avoiding a breach of social distancing requirements

Disclaimer:  This series of articles is intended to provide general information only and does not constitute legal advice. The article is in summary form and we recommend you seek legal advice or other professional advice as to whether and or how the information in applicable to your circumstances. The information in this article was current at the time of publication, however it may no longer be applicable.

Family Law COVID-19 FAQ’s: Part Two

Many parents have parenting plans, orders, or arrangements in place which require their child to move between their house and their partner’s house. Children moving between their respective households will not be in breach of the COVID directions.

Some parents have expressed concerns that when their child is at the other parent’s house there are more than the allowed number of people at the premises.

In relation to such gatherings the current Emergency Management Act 2005 (WA) Section 71 And 72a Closure And Restriction (Limit The Spread) Directions (No 3) defines as prohibited  a gathering of more than twenty (20) persons in a single undivided indoor space or a single undivided outdoor space that is a public place at the same time.

However, the Directions go on to list a number of exceptions which include a gathering in an indoor space or an outdoor space where everyone in the gathering is a member of the same household.

A household is further defined as two or more persons who usually reside at the same place, irrespective of whether those persons are related to each other and includes by way of the specific example that a child who usually moves between the child’s father’s home and the child’s mother’s home on a week-about basis is part of the father’s household when the child is living with the father and is part of the mother’s household when the child is living with the mother.

This means that your child will be considered part of both their parents’ households and will be exempt to the twenty (20) people gathering limit while at either parents’ house.  That is, the usual occupants of that family member’s household.  Although in theory twenty people might be gathered, most Western Australian households’ have many less than 20. 

What can I do if my usual drop off or pick up location is closed?

We understand that there are many different directions and restrictions in place which make it difficult to strictly comply with parenting plans, orders, or arrangements in the current situation.

A common example of this is when the agreed pickup and drop off location, or the location where time is to be spent, is closed.

We recommend, if it is possible, communicating with the other parent in the simplest manner, by text or email and attempting to find a solution which keeps in view the best interests of the child.

If any agreement is reached, even if it is temporary, ensure that it is in writing.

This is a very difficult time for everyone, and it is important to understand that people will have different experiences, concerns, and responses with respect to COVID. Even when acting sensibly or in the best interests of a child an agreement may not be reached, where this occurs further guidance or legal advice should be sought.

 

Travel Bans

Originally WA had in place a strict regional travel ban which meant that people were generally not able to enter a regional area from another regional area or move between regions.

From 18 May 2020 the regional travel restrictions have been eased to provide for travel within the following expanded regions:

  • Perth, Peel Region, the South West, and the Great Southern region;
  • the Mid West region, Gascoyne, and Pilbara;
  • the gold fields and Esperance region; and
  • the Kimberly.

Persons still must not move between the expanded regions, only within them.

The regional travel bans have always provided a variety of exemptions for travel between regions. The exemptions include traveling between regions if it is necessary for the person to do so for the purpose of fulfilling their obligations under a parenting plan, parenting order of a court or other parenting arrangements.

This means that where your parenting plan, order, or arrangements requires travel between regions it should continue as normal.

We recommend you keep a copy of your parenting plan, order, or arrangements with you when traveling between regions or alternatively apply for a G2G PASS. The G2G PASS is an app which allows you to apply for approval to travel regionals for your approved purpose in advance.

The WA state border remains closed and travel is not permitted into WA unless an exemption is granted.

If your parenting plan, order, or arrangements require travel interstate and this is no longer possible due to the impact of COVID (such as travel restrictions, or no availability of flights, or directions put into place by other States or Territories) you must still attempt to comply as much as reasonably possible.

We recommend having a conversation with your child’s other parent and attempting to reach an agreement, if possible. This could include increased video calls in lieu of time spent or make up time to be arranged once the restrictions have eased.

You should be careful to use your best efforts and not use COVID-19 as justification for reducing your child’s time with the other parent.

If your relationship with the other parent is strained, we recommend you obtain the assistance of lawyers to assist you in reaching an agreement and ensuring parenting plans, orders, or arrangements are complied with as much as reasonably possible