What in the Wealth? High Net Worth Cases and Why You Need Specialist Family Law Advice

When relationships break down, dividing assets can be complex – for high net worth individuals, the complexity can multiply.

What makes a family law case “high net worth”?

In Australia, a high net worth individual is generally someone who has at least $1 million in net investible assets, excluding their home, business and superannuation (if not a self managed superannuation fund). Investible assets are those assets that can be converted to cash quickly and easily for the purpose of investment.

The Australian Taxation Office considers someone as “wealthy” if their net worth is over $5 million.

How does the Federal Circuit and Family Court of Australia deal with high net worth family law cases?

The relevant legislation about property division including the Family Law Act 1975 (Cth) and Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) deal with property division in the same way despite the net value of the asset pool available for division in family law cases.

Therefore, the Court generally deals with all property cases the same way by applying the relevant legislation.

High net worth cases can take longer than other family law matters. This can depend on many variables including the need to value assets such as properties, businesses and other relevant structures.

What are the key considerations in high net worth family law cases?

1. Get Expert Legal Advice Early
   Whether separation has already occurred, or if you are simply contemplating separation, it is important to see a family lawyer experienced in high net worth cases to get expert and strategic family law advice.
   It is crucial to develop a strategy early on to assist you in achieving your desired family law outcome. Strategy consideration and development is not just limited to your family lawyer but should also include others such as your accountant and financial advisor.
2. Financial Agreement
   It is necessary to identify whether or not a “Pre-Nup” Binding Financial Agreement has previously been entered into and if so, obtain advice about whether it is enforceable.
3. Identifying the Asset Pool
   Identifying the asset pool available for division in high net worth family law cases can be a long and complex process. The asset pool may consist of real properties, businesses, shares, self-managed superannuation fund and overseas assets.
   
   It is not uncommon for there to be various companies, partnerships, trusts and structures involved which means that a clear understanding of the asset pool is crucial.
   
   If there is a dispute about the value of assets such as real properties and businesses, then these assets will need to be jointly valued by an agreed and appropriately qualified valuer.
4. Spousal Maintenance
   Spousal maintenance is financial support paid by one party to the other following the breakdown of a marriage or de facto relationship. You may have also heard it referred to as “spousal support” or “alimony”.
   
   Generally, spousal maintenance is relevant if one party is unable to meet their own reasonable needs and the other party has capacity to pay or contribute to those needs.
5. Disclosure
   It is not unusual for one party to control the parties’ financial affairs during the relationship. Usually, this is the party who is, or has been, the main income earner. This can result in the other party not having a clear understanding of their financial circumstances including the nature and structure of the assets and liabilities that form the asset pool and the overall net value of the asset pool.
   
   Parties to a family law dispute have an obligation to provide “full and frank” disclosure to the other. This means that the parties must provide all information relevant to an issue in the case to the other party.
   
   In financial cases, disclosure is required in relation to parties’ direct and indirect financial circumstances such as all sources of income, interest, earnings, property and other financial resources.
   
   The duty of disclosure is ongoing and continues until the case becomes finalised.
   
   The Court has the power to impose serious penalties on a non-disclosing party. For example, not allowing particular information or documents to be used as evidence, staying or dismissing part or all of the non-disclosing party’s case, making an Order for costs against the non-disclosing party and fines or imprisonment if found guilty of contempt of Court.
6. Third Parties
   Consideration should be given to any other parties whose interests may be impacted as a result of the family law case. These parties are known as “third parties” and can be common in high net worth family law cases.
   
   A third party can be joined to Court proceedings by making application to the Court seeking to be joined or otherwise by being joined by a party to the case.
7. Confidentiality
   There can be increased public interest in high net worth family law cases, especially if they involve parties considered to be high profile. Confidentiality and privacy are imperative.
   
   Section 114Q and Section 114R of the Family Law Act 1975 (Cth) make it an indictable offence to communicate to the public a list of Court proceedings referring to names of the parties and/or communicating to the public an account of proceedings that identifies parties or others involved in Court proceedings.
   
   Parties involved in high net worth family law cases need an expert and strategic legal team to assist them to achieve their goals. Our experienced family lawyers can provide you with tailored and strategic family law advice.

Why you need expert legal advice

High net worth cases are about navigating legal, financial and emotional complexity, as well as dividing assets. You need an experienced family lawyer to provide:

• Strategic insight in relation to the law, finance and negotiation;
• Access to expert valuers, accountants and tax advisors; and
• Clear and considered expert legal advice.

We are experts in dealing with clients at all levels of wealth, if you need advice on issues raised in this article, please reach out to FGD and we will organise for you to meet one of our solicitors.

Article By: Felicity Francis

Family Lawyer

Felicity is a passionate family lawyer who has spent most of her career in private practice, while also volunteering at the Women’s Legal Service Victoria for many years. She is experienced in complex property matters involving businesses, companies, self-managed super funds and trusts as well as high conflict parenting matters. Felicity was born and bred in a small country town near Echuca/Moama. She loves the big city life in Melbourne but also enjoys escaping back to the country for a change of pace.

Read More >