QLD Best way to protect your home in a divorce

[Barcafc00]

hi,

I and my partner in a de facto relationship for 2 years and we own a unit %50 and %50

I will be inheriting some money from my grandmother 's land in overseas in few years time and will buy a property with using my savings too...possibly there wont be any mortgage on it ..even if i get mortgage it will less than $50.000 and mortgage will be under my name.

My partner knows about this and we talked about prenup that she wont claim anything on the property i buy my under name .

However i heard prenup or binding financial agreements can not be very strong in family court in case things go nasty in the future.. as we all know breakups can happen and it can change people ol..

So what's the best way to protect my asset? Establish a trust and be sole trust beneficiary?

 

[sammy01]

Not gonna like my advice...

Trust the legal system.
So you can spend $$$ on a BFA - One solicitor I asked refused to do it. He said that a barrister would do it but it would cost Big $$.

Even if you got one that was rock solid UNSINKABLE - Like the titanic.. (ouch). Your partner could still challenge it. Sure partner might not win BUT you'll still be blowing $$$ to fight the application to challenge it.

Having fun yet?

So there is no template - no strict rules on how courts divide assets. It is a case by case kinda gig. But there are some guidelines. Who brought what into the relationship is a factor... In my divorce I, after 7 years of marriage, my solicitor argued that most of my superannuation should be quarantined because most of it was earned in the first 15 years of my working life. So the ex was entitled to some of the super from the 7 years we were together…


So, you get this inheritance in 5 years. By then you’ve been together for 7 years. If you split up shortly after that then the inheritance would be a factor in the case but the ex would not get an automatic half… But in 25 years time a judge would look at it differently.



So trust the legal system. And when you buy that property, don’t put her name on the title. It means you can sell it without asking her. And kinda shows that you and her kept finances kinda separate



Short version – There is no certainty in this life.

 

[Rod]

... but a well written BFA helps. Needs to conform to the newish provisions in the Family Law Act to be binding.

Scott & Scott (No. 3) [2019] FamCA 936 is a case where the BFA was held to be binding.

A BFA introduces a hurdle the other party has to jump before a court will even look at entertaining a change to property rights. Good insurance in my view.

 

[Atticus]

So what's the best way to protect my asset? Establish a trust and be sole trust beneficiary?

Placing assets in trusts won't exclude those assets from property division, also a BFA specifically designed to defeat a partners normal rights is probably going to fail if challenged..

An inheritance is generally accepted as a contribution by the beneficiary that is given a lot of weight in property divisions, although that weight is diminished by time & circumstance..... So for example, after having had an inheritance for 10 years & the proceeds of it being used on joint assets or mixing it with joint funds makes it very difficult to quarantine in a future separation....

So the best way to have it accepted as a separate, quarantined fund moving forward is just to bank it as a lump sum, into a bank account (not Super) in your name only & leave it there.... If you separate in the future, that money will still need to be declared, but is much less likely to form part of the asset pool for division... that said, it most likley WILL be accepted as a financial resource that you have available to you for future needs that your ex does not, & as such likley will alter the division to meet the just & equitable test...

So if you are going to invest it in property, I still advise that a WELL written BFA is going to be your best bet (if your partner agrees to sign it that is) taking into account that because of that property being quarantined by the BFA, that your ex is provided a greater proportion of remaining assets.... The Idea of a BFA is so that both parties can have some degree of confidence on how assets will divided IF there is a separation in the future, to that end, it's still wise to amend it as/if material circumstances change over time... Children coming along is a good example