When a Marriage Ends – Financing a Family Split

Background

As a multidisciplinary organisation with a strong collaborative approach, it’s common that we will assist a client across a number of different areas – for example, real estate, finance and legal. As detailed in the following AAG In Action, our Finance and Legal Teams came together to assist long-standing clients of AAG who required professional advice to guide them through their marriage breakdown.

The couple initially approached AAG to assist in managing the financial separation along with the preparation and lodgement of the Family Court Orders. Within their portfolio were a number of properties, all of which were financed and with the family home as collateral. Our clients wanted to ensure that their financial separation included:

1. Keeping the family home to enable their children to stay living there;
2. Retention of their investment properties and the associated loans; and
3. What they deemed to be an equitable split of circa 55/45.

During the preparation of the Court Orders and Form 11, it became clear that while our clients materially agreed on the financial separation, achieving the split from a finance perspective was going to be challenging. Their ability to refinance and restructure the loans to achieve the desired outcome was going to be hindered by the following aspects:

1. The decline in the property market, therefore reducing the equity available in the properties; and
2. The ex-wife’s current employment status and eligibility of her income.

It became clear that AAG’s assistance was required to ensure all of the following aspects were achieved:

• A suitable financial split could be agreed upon;
• Finalisation of the Court Orders and Form 11;
• Obtaining finance in accordance with the executed Court Orders; and
• Ensuring the overall structure remained as tax-effective as possible.

AAG in Action

The AAG team worked closely with several lenders to determine the appetite and options available to refinance and restructure our clients’ loans and properties in accordance with the Family Court Orders. These options were also reviewed from a tax perspective, to ensure our clients not only executed the Court Orders but that the tax benefits of the initial loan structures remained.

AAG then worked with our clients to evaluate each of the options available, liaising with both parties to ensure they agreed with the proposed course of action. Our goal was to achieve the best possible outcome for both parties, allowing them to execute the Court Orders and move forward with their lives.

Result

Our clients were thoroughly satisfied with the support they received from AAG. Within a short space of time, our teams helped to establish a security guarantee between the parties, allowing the family home to remain and be transferred to the ex-wife. The ex-husband was then able to take over the investment properties and refinance the existing loans.

AAG’s caring and professional staff have the capability to navigate clients through the myriad financial and legal challenges involved with separation and divorce. If you need support in this area, please contact the AAG team today on (08) 9227 6300 or email legal@austasiagroup.com. We are here to help you!