We are in the midst of a global pandemic with the share market at an all-time low, our Australian dollar historically low and the property market expected to fall up to 20%. If you are going through a property settlement, you may be increasingly worried about what this means especially where you were perhaps negotiating your property settlement in January 2020 but now your financial position has drastically changed.
While the situation is very unknown, you will likely need to consider whether a swift resolution is in your best interests or whether postponing your mediation and/or valuations until the current market situation is more known would better suit your circumstances.
To assist you in making a decision regarding the direction of your property settlement, here are some practical tips to consider with the ever-changing pandemic situation:
Relook at your Property Pool
You will need to relook at your property pool available for distribution. This involves an assessment of all of the assets, liabilities and superannuation of both spouses having regard to the current market value of all real property, shares and superannuation. The impact that COVID-19 may have had on your property pool is:
- The value of shares held by parties in publicly listed companies has plummeted as a result of the decline and volatility in the current global markets. This will also have a significant impact on parties’ superannuation or a component of their superannuation which may be invested in shares;
- The value of a business may have significant changed in the current market. Even if a business valuation was undertaken in the past 6 to 12 months utilising the businesses 2019 financial statements, this would not have had regard to the 2020 financial year and inevitable business distribution, cash flow issues, and supply and demand reduction. There may be an increase in insolvency and bankruptcy in businesses which had not previously been a significant concern;
- It is unknown how the COVID-19 pandemic will affect the real estate market despite speculation regarding the impact it will have. We encourage clients to obtain advice from their real estate agent and/or obtain updated valuations to ensure that the current market value of properties is reflected in their property pool.
Adjustment of Interim Financial Arrangements
Parties may need to make adjustments to the interim arrangements regarding payment of expenses for another party including spousal maintenance. Before these issues become urgent, detailed proposals should be provided to another party to attempt to manage these situations without litigation.
When considering any change to interim financial arrangements, it is important to speak with your accountant and/or bank regarding the government incentives implemented and available to you to assist small business owners and homeowners with payments over the coming six (6) months. This should be investigated before making a proposal to another party regarding a change in interim financial arrangements.
Consider your Employment
You may have been proceeding on the basis that your employment was secure and that you were earning a high income. You may have also been working on the basis that you were planning to retire in the coming 12 months. But, is this still the case? Are you at risk of being made redundant? These factors make a significant difference to a property settlement and may have changed drastically in the past month and will be relevant in considering your property settlement entitlement.
Going to Court
While your option to apply to the Court for a property settlement matter remains an option, the impact COVID-19 has had on delays in the court system and how they prioritise property matters has significantly changed.
It is extremely difficult for us to advise you when your property matter may be listed for a Trial as parenting matters are being provided priority. It is now more important than ever to look at Mediation and Arbitration as alternative dispute resolution paths.
Look After Yourself First
In the current climate we are becoming increasingly anxious and concerned about both our and our family’s wellbeing and stability in this market. Please ensure that you seek assistance and speak with a counsellor or psychologist if you are struggling with the current global uncertainty.
Our office remains open remotely to ensure the safety of our staff and clients. Our Solicitors are available via email, telephone and Zoom to speak with you. We remain available and committed to ensuring that you reach a speedy resolution in relation to your property settlement matters.
If you have any concerns about your property settlement matters, please contact us today on (07) 3532 3826 to arrange a $300 fixed fee initial consultation with Lauren Finlayson, Special Counsel here at Parry Coates Family Law.