Specialist support from accountants and financial advisors is generally retained to assist with financial protection and the navigation of financial matters. A client may seek out this support during financially complex and sensitive situations and the client may act on this professional advice when making significant decisions in their life.
It is imperative to stay vigilant to the signs which may indicate that a client requires additional support from a legal professional. Encouraging the client to seek advice will not only protect them but also provide them with clarity as to their legal obligations.
It is beneficial for anyone experiencing a major life change to obtain legal advice as this will ensure that they are fully informed. For instance, if a client is considering separation, it would be beneficial for them to obtain advice regarding the process and turn their mind to how they may support themselves, where they may live, as well as whether the process would inadvertently affect their future living circumstances. Often this advice will make a difference to the client, which will contribute to their peace of mind during this time of change.
While discussions regarding potential marriage, separation or other major life events are common indicators that your client should obtain independent family law advice to better protect themselves, there are some signs that are tricky to identify.
Here are some common risk-based indicators that a client should seek legal advice from a family lawyer:
1. Informal agreements relating to property
If the client discloses that they have entered into an agreement regarding property division following separation, and such agreement was finalised without the involvement of solicitors, it may be an indicator that the client has entered into an informal and unenforceable agreement. These types of agreements are not binding and can often be to the detriment of the client, as they leave the client open to the other party making a further claim against them in the future.
2. One party controlling all finances
If it is clear from the onset that the client is ill-informed of the household or business finances and their partner appears to control all financial accounts, loans, and spending, the client may benefit from having some discussions with a family lawyer.
3. Unexplained changes in spending or asset management behaviour
Sudden unexplained changes and shifts in finances, large asset purchases or sales, withdrawing large sums, or liquidating investments without clear commercial reasoning, is a common indicator of impending separation.
This type of behaviour can indicate an attempt to alter an asset pool before property settlement proceedings or separation. It can often put the client at significant legal risk.
Concerns about asset ownership or control
Though it is not uncommon for clients to be reasonably curious regarding types of asset ownership or restructuring of assets in a relationship, unprompted questions about assets held solely in their partner’s name or business structures can signal uncertainty about their financial position. This is particularly relevant when dealing with family trusts, companies, or SMSFs.
Why early legal advice matters
Every situation is different, but delaying legal advice can have serious financial consequences.
Early legal intervention can:
• Help clients protect assets or prevent dissipation;
• Provide advice on interim arrangements, such as residence of the family home; and
• Avoid informal agreements that may not be enforceable.
Accountants or financial advisors are in a unique position that enables them to detect these early warning signs. While you cannot offer legal advice, encouraging the client to obtain legal advice can help them avoid costly mistakes.
Call us on 08 8414 3400, or email [email protected] to speak with one of our experienced lawyers.