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Family Law calendar    Apr 04, 2017

Family Law: Case Study – Transferring property to loved ones

The law is fluid and often only changes when situations arise forcing an otherwise unanticipated outcome. This is a case study on transferring property to loved ones which our firm has dealt with in the past

The law is fluid and often only changes when situations arise forcing an otherwise unanticipated outcome. This is a case study on transferring property to loved ones which our firm has dealt with in the past.

 The situation: Andrew has separated from Beth. Andrew has now found a new partner in Chelsea and is living with her. After separating from Beth and moving in with Chelsea, Andrew transferred a commercial property in his name into Chelsea’s name for $50,000.

 The problem: The problem with Andrew’s actions in this scenario is that although property may be held in only Andrew’s name, it is a joint asset of Andrew and Beth and needs to be considered as a joint asset. By selling the property to Chelsea, Andrew has reduced the asset pool of the relationship. This is a problem for Beth because it means there is less value in the joint asset pool to divide. Beth may also suspect that Chelsea will transfer the property back to Andrew upon the conclusion of their settlement. There may also be the problem where the asset was transferred to Chelsea for less than the asset was worth.

 The outcome: The outcome of a situation like this will largely depend on the facts at hand. Whether Beth can get the property itself or will only be able to receive compensation some other way will largely depend on the nature of the property transaction. The kinds of things that will be considered are i) whether the property was sold at market value or below market value ii) whether the deal was at arms’ length and iii) when the transfer occurred in relation to the relationship breaking down. If a property has been sold drastically below market value and has not been transferred at arms’ length, it is likely that Beth will be able to pursue its value to add to the property settlement.

 The implication: Property which is in your name is not necessarily yours to deal with however you wish. If you are involved in a family law property settlement, avoid selling or transferring property until the settlement is over. If you cannot avoid selling or transferring property, make sure you inform your ex-partner and expect possible ramifications later on in terms of the division of property you will receive.

 If you have a family law matter, concerns about how to get a family law property settlement or questions about family law and separation in NSW and want to find out more please do not hesitate to contact us on 9688 6023 or email us at info@franklegal.com.au.

 Contact The Family Law Team For A  Free First Conference

 This article is provided to the reader for general information. It is not legal advice. It was written by Andrea Spencer & Emily Graham and edited by James Frank.

 More from the blog:

Family Law: A case study - On service in family law divorce

A brief summary on family law property settlement

family law property settlement, family law and parenting, divorce, family law property settlement in NSW, case study, understanding family law

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