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Mistakes to avoid when separating – a focus on property settlements

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Mistakes to avoid when separating

For most people going through a separation, it is their first time, so it is not unusual to have no idea of the process to follow. It can be difficult to know if you are making the right choices and what the consequences of your actions might be in terms of coming to a fair property settlement between you and your ex-partner. 

Separation is hard enough on its own, you do not want to add more to your plate by making some common mistakes that could have been easily avoided. Being aware of some of the ways that a separating couple can prepare themselves is the first step in the right direction.

In this article, we explore some of the common mistakes we have seen come up time and again in our time as family lawyers. We also explore how you can avoid making the same mistakes.

Mistake 1 – Delay seeing a family law specialist

For people considering a separation, one of the most important things to do first is to seek legal advice. Ideally, you should do this discreetly and it is possible to do this before you actually separate. This may mean you have to find a way of paying lawyers discreetly if you have joint bank accounts. The reason it is so important you seek legal advice before you actually separate is so your lawyer can advise you on everything you must take into consideration. 

A family lawyer will be able to give you an insight into crucial matters that you need to be aware of before you make a decision to separate. They will confidentially help you to prepare for what is ahead should you chose to separate. They will also be able to refer you to other appropriate  professionals to assist you during this difficult time. We may need to discuss the impact of separation on your safety and give you advice about the steps you may need to take to ensure yours and your children’s safety. 

When a client comes to us and indicates they are considering a separation we will go through with them all of the key issues about whether or not there should be a physical departure by either party from the home. This usually does not make a difference to the ultimate entitlement, but it can make a significant difference in how quickly a matter resolves. If parties are separated under the same roof there is often a common interest in achieving an earlier settlement.

Mistake 2 – Not having documentation

By coming to see a lawyer before deciding to separate, we can give you a significant checklist of all the information you need to bring to us at the time you do separate. This information can often be gathered discreetly. You are entitled to this information and there is nothing illegal about copying this type of information which is within the family home.

Examples of financial documents a lawyer might need from you:

  • Contracts of Sale
  • Loan Documents
  • Bank Balances
  • Copies of Wills
  • Superannuation documentation 

Preparing sufficient documents that your lawyer will need, can help to move your settlement along much faster. A family lawyer will know, after speaking with you, what you do and don’t need.

Mistake 3 – Withdrawing of funds

Another mistake a lot of people make when separating is for one or both parties to access or redraw significant funds in a bank account. This is something you need to see a lawyer beforehand about, so they can give you advice and explain the risks. 

Be very careful about  clearing out bank accounts because there are emotional and tactical impacts of doing so. What you can do though is to make sure steps are in place to ensure that if you or the other party wish to do so, then accounts require both signatures before any major withdrawal.

It is also important not to go on a spending spree using joint funds prior to separating because doing so will bring about distrust and hurt making the way forward difficult for all parties. This can cause the settlement to drag on and cost both parties more in legal fees.

Additionally, what we have seen from many family law cases we have handled is that secretly withdrawing significant funds makes the separation process go from bad to worse. Speaking to your lawyer about what to do beforehand will provide you with reassurance about what will happen in terms of your funds. This peace of mind can be crucial to ease anxiety and prevent you from spending or withdrawing funds out of fear.

You want to go through your separation as smoothly and timely as possible and avoiding any unnecessary conflict along the way can help achieve this.

Mistake 4 – Not having records of other valuable assets

Where there are a lot of high-value assets in the family home such as jewellery, artwork or significant collectables, it is wise to take a numbered photographic inventory of each item. This is because one party might say the piece is worth significantly less than what the other person believes it is worth. If it is not catalogued it may be (accidentally or deliberately) omitted from the pool and therefore can fall off the radar in terms of being able to be valued for the purpose of settlement.

Aim to get records of insurance valuations to prove the value of certain goods. Valuations of valuables can help you to have a good inventory that will prove helpful in preparation for negotiation and settlement. From my experience, by providing a thorough inventory, you can move faster with your overall settlement.

Mistake 5 – Expectations about legal entitlements from a separation

There are a number of common misconceptions about property settlement outcomes in the community. Many people are told by family and friends that they should expect a certain outcome. Their understanding of what their legal entitlements are is often incorrect. While receiving well-meaning advice from friends and family, it is important to understand that each situation is different 

Individual factors of your matter are what will determine what you are entitled to. The age of any children you have, who has the responsibility of the children and the care arrangements all play a role in determining how the asset pool should be divided.

What you may not know about speaking with a family lawyer is that the first conversation we have is not about encouraging a separation. As family lawyers we are compelled, under the Family Law Act to do what we can to promote relationships being maintained. When people come to us who are considering separation, we have a duty to explore what we can do to help. 

We often help with recommendations for individual or relationship counsellors or other assistance. I personally hope that people who speak to us can manage to get their relationship back on track and I take a lot of joy if people can reconcile a strained relationship. A lot of people in the community go through counselling and manage to find their way back into a happy relationship. 

That being said, if a person decides to separate at some point, if they have sought specialist family law advice they are aware of what they need to think about and do before separating.

If you are thinking about separating or are going through a separation, taking the steps above will help you to get through the process as smoothly as possible. By avoiding these mistakes, the process becomes as straight forward as possible, ultimately saving you significant stress, money and time.

DDCS Lawyers specialise in all aspects of family law and can help guide you through the difficult process of separation. If you need assistance, contact our team on (02) 6212 7600 to book a consultation.