Thomson Reuters Weekly Tax Bulletin & Thomson Reuters Separation and Financial Services Bulletin
Family Court proceedings are fraught enough as it is with the emotional issues involved. But the necessity of splitting assets etc frequently brings in tax and superannuation issues … and therefore much complexity (and more emotional angst). A recent Family Court case has highlighted the importance the Court attached to a report prepared by a financial planner. It is worth noting.
Importance of the Financial Planner’s Report
The financial planner’s report was found to be reliable evidence of the intentions of the clients in Hampton & Farley & Ors [2013] FamCA 213 (Coleman J, 5 April 2013). This case also illustrated the importance of clearly identifying the client.
Best Interests Obligations
The best interests obligations in the Corporations Amendment (Future of Financial Advice) Act 2012 (“the FoFA reforms”) are mandatory from 1 July 2013. It is however beyond the scope of this article to consider the impact of the FoFA reforms, if any, to financial planners in circumstances similar to those of the financial planner in this case.
Background
Mr and Mrs Farley Snr separated after a de facto relationship of about 10 years…
The Asset Pool
The wife submitted that the net assets of the parties were worth about $2.4m…
The Financial Planner’s Report
In 2004, five years prior to the separation, the financial planner gave verbal advice to the husband and the wife as well as to the son and his wife…
Outcome
The Family Court found that the husband did not have a beneficial interest as a partner in the partnership or as a shareholder in the corporation…
It is important to reflect that a report of a financial planner may be evidence in family law litigation, which means that the financial planner may be called to give evidence as to the client’s legal and equitable interests and any advice given…