Family law property settlements go beyond the mere traditional notions of assets and liabilities. In an increasingly digital world, the nature of assets is transforming.
In both our family law and commercial law practices we are seeing an increase in cryptocurrency assets as well as family owned business and life partners who own and operates individual businesses. For example, in any family separation a business owner will need to undergo a valuation of a business. This will involve being able to understand the business financials and interpret the business’ financial statements.
Choosing a family lawyer with a business background can be beneficial during a financial settlement because they can bring their business skills alongside their unique commercial and property perspective and skill set to the table. Here are a few reasons why!
A business law background within family law means that your lawyer will most likely has experience in both national and international property transactions, contract law along with disputes, partnership agreements, commercial litigation and mediation, and complex financial transactions that require assessment of assets and liabilities (including cryptocurrency).
Our family law team have assisted clients in locating and valuing overseas properties for examination in property settlement matters before the Family Court. This has led to client successes in being able to obtain a more favourable property settlement, as there are greater assets available to be divided.
It is important that your lawyer has excellent attention to detail to ensure that business documents disclosed during your family law settlement are accurate and complete. They must also be able to review and analyse large volumes of information and identify any potential complex legal issues or inconsistencies. From there, your lawyer can then develop a legal strategy for your matter.
Developing a Legal Strategy
Business lawyers are called upon to help their clients solve complex legal problems. They must be able to think creatively and develop innovative solutions to these problems while also ensuring that their clients remain compliant with applicable laws and regulations.
Just as business relies on legal strategy, family lawyers require this type of approach in their practice to protect your business, financial and lifestyle future. An appropriate legal strategy from the outset is vital to ensure that your interests are being protected in any property/financial settlement and custody matter.
In addition, a family lawyer with a business background can help you develop a long-term strategy for your finances whilst you are dealing with your property settlement. Whilst a family lawyer cannot give financial advice, they can refer you to appropriate financial planning services or work with you to understand your legal options in how to deal with your business whilst you navigate your separation.
Tribunal and Court experience
No strategy in business is the same, nor is any legal strategy in understanding and dealing with your business during separation. Whilst legal strategies may differ, they do require lawyers to attend a range of tribunals, mediation services and courtrooms. This experience is invaluable in determining your legal strategy! Having the right family lawyer with a business background can also ensure that the Court is informed of any outstanding issues, effectively put your position forward and advocate on your behalf as well as negotiate with the other side. Again, successful negotiations will come down to your lawyers understanding of your business finances.
Understanding of Business Finances
In navigating various court settings, a family lawyer with a business background will have a better understanding of complex financial situations that may arise during a settlement. They can analyse financial statements, tax returns, and other business-related documents to ensure a fair division of assets.
An important aspect of family law property settlements is the requirement for the parties to provide financial disclosure. This is a significant process that is required before you can consider negotiating a property settlement outcome. This is bread and butter work for business lawyers.
Your financial analysis needs to be perfectly constructed, along with your analysis of your financial contributions during the relationship, to formulate your argument and achieve a fair property division.
Your family lawyer needs to analyse financial information to identify key issues as well as determine whether your ex-partner has been hiding assets, the most obvious being whether there have been large bank account withdrawals or transfers to unknown bank accounts. Have they attempted to de-value or minimise the value of their business, in an attempt to create an unfair property division? If this is the case, you may need to have the business formally valued.
In many cases, a family business is involved in the settlement. A family lawyer with a business background can engage a formal business valuer, who can help determine the value of the business and ensure that it is divided fairly. It is important to make sure the true value of your business is accurately reflected in your property settlement.
For example, we worked with a client who owned a business with his father. The other party believed that, as the business was making a large amount of money, that it would be valued significantly high. However, a review of the financial statements demonstrated that the business had significant overheads and payments that it had to meet. Therefore, whilst the business was generating a lot of money, its overall profit was not very high. The business needed to be formally valued by a registered and qualified business valuer. The valuation report returned a value of the business in line with our estimate. This provided a significant advantage to the client as the true value of the business was measured and stopped the other party from claiming an inflated amount from the property settlement.
In addition to business valuations, a family lawyer with a business background can help you understand the tax implications of various settlement options. They can also work with your accountant to minimise the tax impact of the settlement and discuss different options as to different settlement outcomes that will ensure minimal tax implications.
For example, if you have an investment property, then you will need to consider the amount of capital gains tax that a sale of the property will attract. This means less money that you will ultimately receive at settlement.
A lawyer with a business background may have experience negotiating deals and contracts in a business setting. This can be beneficial during family law negotiations with the other party, as they can approach the process with a strategic and analytical mindset.
Family law has an increased focus on the parties avoiding prolonged and expensive court proceedings and instead encourage parties to engage in alternative dispute resolution methods to resolve their property settlement dispute. Quite often, it is a cost-effective method and allows you to have an open discussion about what you are looking to achieve in terms of your property settlement. Whilst it is a less formal setting than court, you will want a lawyer who can utilise their business mindset and confidently negotiate on your behalf.
Therefore, mediation skills are imperative to you achieving success in your family law matter.
In order to effectively negotiate, you need to be able to effectively communicate your position to others.
Business lawyers must be effective communicators who can explain complex legal concepts in plain language. They must also be able to communicate effectively with clients, opposing counsel, judges, and other stakeholders. They need to instil confidence so that you believe in their ability to best represent you.
The family lawyer with a business law background brings a wide range of skills and expertise to the table, making them an invaluable asset for any person looking to navigate complex legal issues during your separation and relationship breakdown. It is this skillset that can help you ensure that your interests are protected and that you receive a fair settlement.
At Digital Age Lawyers, we believe in approaching matters with a business mindset, take the time to understand your finances, and develop an appropriate legal strategy that ensures you receive a fair outcome in your financial/property settlement.