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 financial 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 close to reaching or finalising a property settlement, the effects of COVID-19 will likely require attention in your family law matter.
Family Court arrangements
The Family Court and Federal Circuit Courts continue to operate but have made significant changes to their processes. How the courts continue to function may no doubt 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, only urgent matters will be conducted through face to face hearings in accordance with strict in-court protocol to manage risk.
Most other court hearings and events will be by telephone or video conferencing and it is anticipated that some non-urgent matters will be delayed or adjourned.
Documents may be filed electronically with registry services to be 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.
Financial resources and child and spousal maintenance
Changes in personal financial circumstances may facilitate parties responsible for paying or receiving child or spousal maintenance to seek a reduction or increase in payments.
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 and parties facing, or whose ex-partners 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 a time to consider settling your family law matter out of court, use alternative dispute resolution such as mediation and negotiation, and to enter those processes in good faith under the guidance of an experienced professional.
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 and 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.
If you or someone you know is looking to purchase a property at auction and needs help or advice, please contact us on 03 8346 4900 or email [email protected]