Family law legal costs can become a vexed issue when it comes to determining how they will be treated in a family law property settlement.
It often happens that a person will obtain some family law legal advice before separation from their partner takes place. At LGM Family Law, our experienced Brisbane divorce lawyers recommend that you do obtain early legal advice when considering separation. It will be important that you consider early on what protective measures may need to be taken pending a final family law property settlement as well as thinking about what your financial needs will be until that property settlement is completed.
A party will continue to incur legal costs until the family law property settlement takes effect.
When working out what is the net asset pool that is available to be divided between you and your former partner, can you take into account the legal expenses that have been incurred by each party? Will the amount of each party’s separate legal costs be treated as received by that party as part of his or her property settlement?
The answer to that question will often depend upon the source of funds from which legal costs have been paid and whether or not those funds were accumulated prior to separation or arose post separation from post separation earnings.
Contact our Brisbane divorce lawyers and divorce lawyers North Brisbane or call (07) 3506 3651 if you need advice regards how your legal expenses will be treated on property settlement or in any other area of family law, whether regarding family law property settlement, divorce, separation, child custody arrangements, child support or spousal maintenance. We offer initial free family law advice and a fixed fee initial consultation. We will be aiming to assist you to resolve your family law issues on an amicable basis without the need for you to go to the family court. If however family court action does become necessary, we have the experience to represent you effectively at the family court.
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In a recent decision of the Full Court in Trevi  FamCAFC 173, the husband effectively increased his property settlement by an amount of $175,000 when he won an appeal against the decision of the primary judge Thornton J (in the lower court) who had refused to add back to the property pool the legal fees incurred by the wife. Thornton J had also refused to add back the husband’s legal costs as the had been paid from his income or “absorbed in-house” whereas the wife’s fees had been paid from the proceeds of sale of the home.
In the Full Court, Murphy J (with whom 2 other members of the Full Court agreed) referred to an earlier decision in Chom & Hopkins (NHC & RCH)  FamCA 633 which distinguished between “legal costs met from property that would otherwise be available at trial and legal costs met from funds ‘generated by a party post separation from his or her own endeavours or received in his or her won right (for example, by way of gift or inheritance)’. The Full Court said that the proposition advanced in that case that such expenditure would not be added back (ie., not treated as part of that party’s family law property settlement already had and received) should be seen as a guideline in relation to the Court’s discretion as to how those costs are treated in the property settlement.
The effect of the decision of the Full Court in Trevi was that the sum payable to the wife by way of property settlement was reduced as the amount of her fees were notionally added back to the property pool and treated as part of her property settlement that she had already received.
You should therefore carefully consider the source of funds from which you make payment of your legal fees. If they are paid from savings accumulated during the relationship, you should expect that the amount of those fees will be added back to the property pool and treated as already received by you as part of your property settlement.
Contact our friendly Brisbane divorce lawyers and divorce lawyers North Brisbane who are ready to assist you to resolve your family law issues, whether relating to family law property settlement, family law legal costs, divorce ,separation, spousal maintenance or child custody arrangements. You can expect to receive from us practical, effective legal advice tailored to your circumstances.