When two parties agree to divide their relationship property by way of an agreement a vital part of the agreement is the disclosure of, and recording of, values for items of property and debts. 

In one particular case, a party failed to disclose accurate share values of a company set up during the relationship.

The party had disposed of company assets to their Trust after separation, which decreased share values considerably. They did not notify the other party that this had been done.

After 9 years in Court, the shares ended up being valued at a hearing using expert evidence. Costs were also imposed on the dishonest party. If that party had been honest about share values, they would have saved thousands in legal fees and avoided a costs order.

When choosing the option to divide relationship property by way of an agreement, it is extremely important that both parties negotiate the terms with full confidence that the other person is being honest and upfront about values of property.

It is important to be careful when drafting an agreement to include values for items of property without legal assistance.

Once you go to a lawyer for independent legal advice, one of the first things that the lawyer will ask is for you to provide, and prove, values of relationship property. 

If values of assets and liabilities are not provided, then a lawyer cannot accurately advise you as to your legal position.  Without disclosure provided, the advice your lawyer can give to you is extremely limited.

There is a legal requirement that each person must receive independent legal advice as to the effects and implications of a relationship property agreement, and that each person’s signature must be witnessed by a lawyer.  The lawyer must also provide a certificate that they have advised their client as to the effects and implications of the agreement.

It is therefore best practice that you bring to your appointment with your lawyer all available disclosure relating to the values of relationship assets and debts. It ultimately saves you and the lawyer more time and money, and usually means that the lawyer can help you negotiate an acceptable outcome a lot faster.

Agreements that do not have values attributed to property or debts, or have limited disclosure, have a greater chance of being set aside in the future by the Family Court. By providing upfront and honest disclosure you lower the risk of this happening. 

Most lawyers will ask you to bring this disclosure to the first meeting. If they don’t, it is good practice to ask the lawyer if they need to see any information as to asset and debt values.

Shaun Cousins