Family law property settlement for young, financially independent couples – is there any point?

You’re young and you’ve been in a relationship with somebody for three or four years. You saved up together for a deposit on a home and, together, managed to obtain a mortgage to cover the rest of the purchase price.  You did some renovations to add value to the home and added a nice driveway. No kids.

Other than the house, there’s nothing else that you really have together.

You and your partner decide to separate. You don’t think it’ll be too complicated. Other than the house and mortgage, the only thing you own together is a joint bank account.  You have both led fairly independent lives, you both earn enough to pay your own way and you both expect to hold down good jobs in the years to come.

You’ve sorted everything else out.  You divide up the furniture, close the joint account and each receive half the savings. Then you just need to sort out the house and mortgage.  You talk to the bank and they’re happy for you to take over the mortgage on your wage if you get the house in your sole name. The bank then sends you off to a conveyancer to get your ex-partner removed from the title. Too easy.

The first thing the conveyancer says is that the government charges stamp duty to transfer the property from joint names into your own name.  That will cost you $8,000.  The conveyancer says that you can avoid that cost if you have an agreement in writing with your ex-partner saying that you’ve separated and that you want the house in your own name. No dramas.

You do this and send a copy to your conveyancer.  Your conveyancer sends it along with a transfer to the Office of State Revenue.

In the meantime, your ex-partner sends you a text message saying that the agreement doesn’t seem fair any more. When your ex-partner’s friend separated, the deal they had was that the friend got a $50,000 payout for transferring the property over. Your ex-partner asks why it is fair to walk away without a payout. Your ex-partner asks for $50,000 and won’t budge.

You get the feeling that your ex is probably correct about walking away for nothing, but $50,000 seems quite disproportionate. After all, what did your ex really do?  Other than put up about $10,000 for the deposit, which was much less than your $50,000, and make the odd payment into the joint account for household expenses, there really wasn’t anything. You both looked after yourselves. You paid all the mortgage repayments. You did the renovations and the driveway with the help of your mates.  Your ex seriously did very little. In any event, you sit back and think to yourself, ‘the agreement is signed, so bad luck’. Everything is fine.

Then your conveyancer rings and says that the Office of State Revenue won’t waive the stamp duty because the agreement you sent to them doesn’t make sense. This whole process is to take a lot longer than you expected. You don’t want to pay stamp duty. Your conveyancer recommends you try again with another agreement and gives you some guidance as to perhaps what should be included. It pretty much says the same thing, as far as you can see. You send it to your ex. Your ex won’t sign it unless it says that you have to pay her $50,000. That way more than half the equity in the home.

Reluctantly, you agree, just to get it all over and done with. You go to the bank to see if they can lend you the additional money. The bank agrees. You write out another agreement including the $50,000 payment. You both sign. Your conveyancer sends it to the Office of State Revenue.

Another month passes. The Office of State Revenue decides to accept this agreement and waives the stamp duty. The transfer and refinance are processed. The bank gives you the $50,000 to pay your ex. You hand it over. The house is in your sole name and matter is over. You breathe a sigh of relief.

Three months later, you hear that your ex has been involved in an accident and can no longer work. Your ex never bothered with income protection insurance. You remember the conversation: it was just another pointless expense.  Your ex was never particularly careful when it came to financial matters.

You then receive a letter in the mail from a solicitor your ex has engaged to act on her behalf. The letter demands that you pay to your ex something called spousal maintenance because she can’t afford her own expenses.  Why should you maintain somebody you broke up with months ago?  The letter says that you have to pay or you’ll be taken to court.

The letter also refers to an inheritance you just received from your grandmother. Your ex used to visit her with you frequently during the relationship. You recall that your ex used to talk to her quite a lot and do some sweeping in the kitchen to help out. Other than that, your ex just sat there on Facebook or playing games on her phone whenever you visited. You were the one who cooked for your grandmother and bought her groceries each week during the relationship. But now your ex wants a share of your inheritance.

You feel sick to your stomach. This cannot be happening. You already paid your ex more than you thought was fair. These claims cannot be legitimate.

Unfortunately, the claims may very well be legitimate. Simply because you did not obtain legal advice as to how best to finalise the matter and protect yourself from any future claims.

We often have young clients who have had these types of experiences while trying to sort out their property division themselves, as well as in the aftermath. If handled incorrectly, the process is a confusing and protracted hassle, sometimes even resulting in money spent unnecessarily.

It is always worthwhile making a small investment in some legal advice when you first separate in order to avoid these types of problems, even if you and your ex are young, financially independent and without children. The costs for an initial consultation with a family lawyer – or for the preparation of a Binding Financial Agreement or Application for Consent Orders to finalise all outstanding matters between you by way of a formal settlement – is invariably far less than the costs of dealing with problems and claims that arise later.

The above is not intended as legal advice. You should obtain legal advice in relation to your own specific circumstances.



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