Among the core issues that arise during a divorce financial settlement is the ownership of major assets. Shared property like real estate and superannuation will all need to be factored into a financial settlement in order to ensure an equitable division of the couple's resources.
However, one of the most important assets for a couple to consider is the ownership of a company. Regardless of whether a business is shared between the two parties or owned outright by one of them, factoring this asset into the final distribution of a couple's joint property is going to be essential.
The importance of making these considerations arose in a recent case before the Family Court of Australia. In the legal action, a woman sought an urgent injunction preventing her husband from altering the finances of a business of which he had sole ownership of.
The wife in this case was concerned the husband's share of the business might be altered in a way which limited the business's exposure to the couple's divorce.
As well as ownership of the business itself, the wife also sought the injunction to apply to loan repayments the company was making to her former husband. The husband had previously made a significant investment into the business, lending it money which was subsequently being repaid into his personal account.
The Family Court agreed with the woman's case, ordering an immediate injunction on the man's control of the business finances. The injunction also applied to the company's bank accounts, with the bank ordered to prevent any movement of these financial assets.
While this injunction was applied to the business, the Family Court didn't enact all of the actions which the wife sought in this case. Originally, the wife also attempted to have the company's finances redirected into a shared account so both parties could calculate the financial position of the company.
The Court rejected this further step, stating that the order would make it harder for the business to operate, and would disrupt their financial obligations around areas like tax.
While this case highlights the importance of assessing every financial asset that could potentially be involved in a divorce financial settlement. In situations like this one, ownership of a business may also require legal action to prevent any alterations to the business prior to a settlement being reached.
For more on the process of negotiating a divorce financial settlement, make sure to contact a family lawyer today.