Attwood Marshall Lawyers Family Law Special Counsel, Michael Twohill, explains the key issues to consider divorce for over 50s.
Divorce for over 50s can be complex. Among life events which can incite the most difficult of emotions, separation from a spouse is considered one of most traumatic for people of all ages. For those over 50, divorce also brings a unique set of legal implications, which only an experienced family lawyer will deal with astutely.
The main reason why divorce for over 50s is different from younger couples is that older couples typically have accumulated more assets. The accumulation of these assets is sometimes complicated by having a business, superannuation fund entitlements, Self-managed Superannuation Funds, and Family Trusts.
The good news is older couples tend to be more amicable. Understanding and working through the complex legal issues which can arise during a divorce for over 50s, with the help of a good lawyer, will allow the parties to exit their marriage with their assets separated into the most optimal of divisions. With that in mind, here are the key issues to consider in divorce for over 50s:
What are the important legal issues for divorce for people over 50s?
Divorce for over 50s is usually about property
Divorce is merely the Order you obtain from the Court to end a Marriage. The correct terminology for the separation of assets is known as a ‘property settlement’, and separate to the divorce. The actual divorce comes 12 months after the date of separation if you decide to proceed with an Application after that period of time. There is nothing to stop you from reaching agreement and resolving your property settlement issues immediately after separation. In fact, it is advisable to do something about trying to settle your property matters sooner rather than later after separation.
Divorce with blended families
Often over 50s couples have blended families, and their contributions are different. In second marriages or de-facto relationships, one party may have contributed more than the other. This may become relevant, particularly in short marriages or relationships. The length of the relationship is relevant. Every case is different however in every case a four-step process (see below) is followed in assessing the adjustments in property matters.
When over 50s present the first consideration is for us is to identify what category they are in – whether they are a couple who have been together for a short or long period of time, and whether they are first or second marriages or relationships. One thing that people need to understand is that when two people start living together, if you’ve been together less than two years, then unless there are special reasons, you may have no right to go to seek a property adjustment.
De-factos – couples never married
Something else to consider is that you don’t necessarily have to be living together with someone to be considered in a ‘de facto’ relationship. More on that in the podcast below.
What is the process for a property settlement, for divorce over 50s?
In every property settlement matter, whether or not you are in court matter, we need to work through what we call the ‘4-step process’. These same 4-step principles apply in all cases:
Step 1: Identify a list of assets and liabilities as at the date of calculation;
Step 2: Look at the contributions. These are the initial financial contributions, financial contributions during the relationship, any post-separation financial contributions, non-financial contributions and each party’s role as the homemaker;
Step 3: Future needs factors – such as the age and health of the parties, any disparity of income, whether or not one or both parties are on a pension, the type of pension, superannuation and any special needs, insurance payouts and inheritances received and when they were received; and
Step 4: Justice and equity – what’s fair having regard to the circumstances of each of the parties.
How is superannuation split in a divorce?
It is quite common these days that when parties separate they may each have superannuation entitlements amongst their assets. When looking at the value of the net assets we include the value of any superannuation accumulated during the relationship. If a party came into the relationship with significant superannuation entitlements and it was a relatively short relationship it would not be fair to include the whole of the value of that party’s super entitlements at the time of negotiations in the calculations.
It is possible however to transfer some of one party’s super entitlements to the other party as part of the settlement. This is what we call a ‘Super-split’. You can only affect a split if you have either entered into a Binding Financial Agreement or obtained Orders of the Family Court or Federal Circuit Court.
There is a process to follow and it takes about six weeks once the documents are signed or orders are obtained. The agreed sum of the split is transferred into the receiving party’s superfund and added to his or her superfund entitlements and the transferring party’s entitlements are reduced accordingly.
In some cases, the party who possesses the greater super entitlements may not be in a position to split at the time the parties are negotiating a settlement. In such cases, the parties may agree or in cases of application to court, the court may order the Super entitlements be ‘flagged’ and a certain amount transferred to the other party upon an event such as a decision to retire. The Trustee is provided with a copy of the Agreement or Order and when the event occurs the Trustee MUST then advise the receiving party of the event and then process the transfer into the receiving party’s nominated fund.
Are Wills relevant to the separation and divorce process?
It is essential for you to update your Will and reconsider your estate planning strategies when embarking on a separation. If left unchanged your estate assets might very well pass on to a person or persons you did not intend passing them onto.
Last year we provided legal advice and services to a lady who had terminal cancer. She had separated from her husband a few months previously and had only months to live. She wished to protect her interest in the accumulated assets of she and her estranged husband. They had a jointly owned matrimonial property and were registered as joint tenants.
The effect of her death would be that the property would pass to the survivor (in this case her estranged husband). We advised her to sever the joint tenancy and register a transfer as tenants in common in equal shares. She was then at least able to protect her half interest in the property. She then simultaneously executed a new Will leaving her interest in the property to her children and set up a Testamentary trust in the Will for a severely disabled grandchild.
In most separations where there is a joint tenancy involved it is advisable to sever the joint tenancy and transfer the property into tenants in common. It is also essential to revoke any Enduring Powers of Attorney and execute a new one appointing an alternate Attorney or attorneys. These are matters we discuss at our initial consultation.
How can Attwood Marshall Lawyers help?
Attwood Marshall Lawyers is a leading legal practice with several speciality departments of law, who unlike generalist lawyers, practise exclusively in their respective areas. I am head of the Family Law department at Attwood Marshall Lawyers, operating from Kingscliff. In my 36 years working as a lawyer it has been a privilege to help so many families, and to now have the opportunity to come back to the Tweed and give something back to the region where I had my origins.
I like helping people, particularly when they’re in a state of crisis. I see myself as the catalyst for assisting parties in a state of crisis to reach a resolution. I take my role very seriously for the benefit of my client. In my mind, there are always three parties in separation – the mother, the father, and the children – and I have always been able to achieve results with the minimum amount of friction between the parties. In any matter I undertake, I seek to achieve an excellent final result for the client, at a minimum cost to them financially and personally.
- Admitted to the Supreme Court of Queensland in 1983
- Admitted to the High Court of Australia in 1983
- Member of Law Council of Australia since 1991
- Member of the Family Law Section of the Law Council of Australia since 1991
- Foundation Member of the Family Law Practitioner’s Association (FLPA)
- Member of Queensland Law Society since 1983
To book an appointment, phone: 1800 621 071 anytime.