VIC Asset protection in divorce

[darkstar]

Hi all,

Wife of 14 years has indicated that, sooner or later, she'll want a divorce.

Basically, she has contributed practically nothing financially, she has next to no savings and no super.

I have a large amount of super, the apartment we live in is in my name, my car is in my name, all our bank accounts are separate. I've always paid the rent (prior to buying the apartment) and have always paid the mortgage, utilities, etc., with no assistance from her. She's recently begun paying me rent however (for the last month or so). In addition, I have small nos. of share held onshore and offshore, and a few thousand with Vanguard. And that's all my assets.

One question: would anyone be able to find out if I hold shares offshore? Would setting up a self managed super fund, or some sort of trust help me to protect my assets? I know some may frown upon these sorts of questions but, for one thing, I've spent about 40 years working to build up a super nest egg, and I don't see why someone who has basically already benefitted greatly financially from our relationship, should get, say, 30% of my super.

Apartment is probably worth about $340,000 and I figure I should have it paid off in about 3 years, if I continue repaying at the current rate.

My parents are in their 80s and I'm due an inheritance that I think will be somewhere in the region of $500,000.

I'm 56, she's 66.

I simply want to know what, if anything, I can do to protect my assets upon divorce - I do not want to negotiate a binding financial agreement with her. Even if she did agree to a BFA, I don't think that, in itself, puts me in any better a position - i.e., if there's no BFA, then we have to enter into a property settlement agreement, upon divorce - either, way, I think I would basically end up in the same position. So, again, I figure it comes down to whether it's possible to protect my assets, in any way.

I don't think she could gather the financial resources needed to take me to court if she's not happy with what I give her in a settlement. Though, I guess she could engage a lawyer on a 'no win, no fee' basis. But, I think that, basically, if what I give her is fair, she's not going to take me to court and potentially lose tens of thousands of $ on court costs.

Anyway, thanks for any advice.

 

[lostinspace]

She is entitled to at least half assuming no children etc.. Too late to protect assets, you have to disclose everything. I can see the argument that will be used for her to get more than half, who paid etc is irrelevant in a long relationship.

Go and get some advice now, she is telling you her intention, my thinking would be, do not wait.

In saying the above, only you can judge her real intentions etc.

 

[Noel Harris]

It's a common assumption that assets held solely in one name, or held offshore, sit outside a property settlement, but the Family Law Act looks at the whole pool of property regardless of whose name it's in, and both parties are legally required to give full and frank financial disclosure, including overseas holdings. Non-disclosure discovered later can lead to an agreement or order being unwound, so 'will she find out about the offshore shares' is the wrong question to be asking.

Restructuring into a trust or SMSF is also unlikely to achieve what you're picturing. Courts look past the legal structure to who effectively controls and benefits from an asset, and can treat trust or fund assets as property of a party (or as a financial resource relevant to their share) where that control exists. This is genuinely business and structure valuation territory, and getting it wrong can create tax consequences under capital gains and other tax rules on top of the family law risk.

It's also worth reconsidering the framing around contribution. Non-financial and homemaking contributions carry real legal weight in a property settlement, 14 years of marriage isn't assessed purely by whose name is on the bank statements. And given the disparity in age, super and earning capacity you've described, spousal maintenance may also be a live issue separate from the property split. A future inheritance you haven't yet received generally isn't added to today's asset pool, but it can be taken into account as a future needs factor.

You've said you don't want a BFA, but that leaves you without formal protection, which means you'd be relying on reaching a fair settlement informally, with no certainty until it's documented. Genuinely, the most effective way to know where you stand (and to reduce risk on all sides) is a proper assessment of contributions and future needs with a family lawyer, rather than trying to engineer around the process.

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Disclaimer: Please note information in this response is general in nature and should not be treated as legal advice. It may not be complete or up to date for your specific situation. Independent legal advice is always recommended.