Protecting your assets prior to Property Settelment
When you are due to receive a lump sum property settlement, what can you do to protect that asset(cash, property or superannuation) from being spent before you receive it?
The Canberra Times reported on 29 March 2012 in an article titled ‘Super spend lands husband in jail’, on a Federal Circuit Court case in NSW. In the case, a husband was jailed for nine months for spending superannuation he had been ordered to transfer it to his ex-wife.
The husband wasted $100,000 mainly on prostitutes and gambling. As that has been one of the only assets of the couple, the wife won't ever recover the property settlement due to her. The court found that the husband should, therefore, be punished by a jail term.
If you find any risk that your ex-spouse may waste assets before a court has made property orders, do you know what it is the options?
You can seek urgent interim restraining orders which freeze bank accounts until the order of the court or written joint instructions by both parties.
You can seek flagging orders in relation to superannuation, meaning the trustee of a superannuation fund is on alert that superannuation should not be paid out to an account holder pending a flag lifting order or you can put a caveat on a property, which prevents the property from being sold until the caveat is lifted by you (there are exceptions to this general rule)
You can seek to join a third party to your application so that the third party is bound by orders not to do something (for example, you could obtain an order restraining a company from paying a benefit to your ex-spouse until the court has considered the risk of assets disappearing).
In the event of extreme urgency, you can also apply to the court to have orders made without your ex-spouse being aware of your application and any orders made, until after the orders are given effect. Such orders are known as ‘ex parte’ orders.
These are simply several of the legal steps you can take through your solicitor to circumvent assets being wasted before a court has made final property orders, to ensure you get your fair share of assets.
Disclaimer : This article provides basic information only and is not a substitute for a professional or legal advice. It is prudent to obtain legal advice from a family lawyer.