Can I transfer funds or property so my ex can’t get it?

The temptation could arise to transfer funds or property to a third party, but what will a Court do in those circumstances?

If the purpose of the transfer is to prevent an ex-spouse from receiving their rightful entitlement the Court will usually reverse the transfer.

Section 106B of the Family Law Act gives the Court the power to reverse transactions that have been made for the purpose of defeating a property settlement claim by an ex-partner.

Some might wonder, how would they find out about the transfer in the first place? Full and frank disclosure of documents and information is a feature of family law property settlement. Property searches to show transfers of real estate are easily done by lawyers. One party providing a copy of their bank statements to the other party can be ordered by the Court or obtained by subpoena. In fact the exchange of bank account statements is a usual part of the property settlement process.

If a party does attempt to hide or transfer assets the Court does not look kindly on that type of behaviour. If it is necessary for a Court to reverse a transaction where property has been transferred to defeat a claim, that can commonly result in the Court making an Order that the party at fault pay the other party’s legal costs, and in some circumstances compensate for any loss that arose.

The power of the Court to reverse transactions can be useful, however it will not be able to remedy a situation where for example a party withdraws funds and spends them on a lavish overseas holiday or otherwise.

It is important to secure assets and property to prevent the possibility of loss or wastage. There are various way of protecting property including:-

• notifying banks that authorisation by BOTH account holders is required for withdrawals

• closing redraw facilities on mortgages or loans

• the transfer of funds to an account for safekeeping

• taking legal advice, and where appropriate lodging a Caveat to prevent the transfer of real estate

• seeking Court injunctions

It is very important to seek legal advice when taking action to secure assets as in some circumstances the withdrawal or prevention of access to funds of a party can be considered family violence.

Talk to our expert family lawyers for advice on how to get the best out of your family law property settlement. Contact David at our Ipswich office for a free initial discussion to protect your interests.