During property settlement in a marriage or de facto relationship the former spouses or de facto partners are required to make a full and frank disclosure of their properties, assets, liabilities and financial resources. This is so that the Court can order for a just and equitable property settlement.
Properties, assets and liabilities are easy enough to identify. It is the financial resources that remain a murky area for some people. This is because usually we only think about such things when we are faced with a property settlement dispute. It is important to know what is a financial resource since the Family Law Act 1975 mandates that it should be included in the ‘full and frank disclosure’ by parties during property settlement.
A financial resource is also an asset just like a property but the difference is it is not alienable unlike a property. For example, a car or a house is a property that is capable of being alienated, meaning it can be sold or transferred for value. On the other hand, financial resources like control over a corporation or a beneficiary’s interest in a discretionary trust are not alienable. Even the borrowing capability of a person is considered as a financial resource. Other examples of financial resources are interests in the estates of a deceased relative or interests in family trusts.
Hence, we can look at financial resource as resources that can generate income or the reasonable expectation that income will be forthcoming to a person. This is why there is a difference in the treatment between a property and a financial resource.
A property can easily be sold or liquidated unlike a financial resource, the income of which is not readily available to a party but can be reasonably expected to arrive to the party. Failure to disclose financial resources might result to penalties.