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Death Thwarts Property Settlement
Creative ACM • Nov 18, 2015
A recent decision of the Supreme Court of Queensland in Alagiah v Crouch demonstrates the need for divorcing couples to finalise their property settlement in a timely fashion, or at the least, to commence Court proceedings before divorcing.
Shantha Alagiah was married to Dr. Ratnam Alagiah for 22 years until their divorce on 25 May, 2012. Throughout 2012, attempts were made by Mrs Alagiah’s Solicitors to reach an agreement with Dr. Alagiah regarding property settlement. Dr. Alagiah owned property in Australia and Malaysia and also had superannuation entitlements, all in his own name.
However, Dr. Alagiah died unexpectedly on 21 January 2013, before property settlement proceedings had been commenced in the Family Court. Dr Alagiah died without a valid will.
Because property settlement proceedings had not been formally commenced prior to his death, Mrs Alagiah had limited options to obtain an appropriate share of any of the matrimonial assets.
Her only option was to file a ‘family provision’ claim seeking orders that provision be made for her out of Dr Alagaih’s estate. She made this application 18 months late, seeking an extension of time from the court. That extension was granted due to extenuating circumstances:-she had been caring for her ill mother in India, her financial circumstances didn’t allow her to return to Australia, and she didn’t have reliable access to phone and internet services to contact her Solicitors.
Unfortunately, that was about the only area in the action where she had success.
Submissions were made by her counsel to the effect that she had been attempting to resolve property issues at the time of her husband’s death . It was also submitted that even though the parties were divorced, that she was still considered a spouse pursuant to the Succession Act and therefore entitled to make a family provision.
The Court considered whether Mrs Alagiah was entitled to receive maintenance from Dr. Alagiah. They concluded that in order for her to be entitled to receive a provision from the estate, she must have had “an actually crystallized right” to payment of maintenance at the date of the death of her husband. There had been no orders for maintenance made, so no such right was crystallised.
Further, the Court found Mrs Alagiah was not a dependant as defined under the Succession Act and therefore not entitled to make a claim for provision out of the estate. Her application failed as a result.
This was obviously a fairly awful result for someone at the end of a 22 year marriage. However, it should serve as a timely reminder that property settlement arrangements should begin fairly soon after separation, and in circumstances where one party holds significant assets in their own name, property settlement proceedings should always be commenced before a divorce becomes final, in order to preserve rights to property settlement.
Buying a home – How to guide Buying a home whether its your first or your third requires careful and meticulous planning. Buying a property is up there with one of the most stressful things you will do in your life and so you want to be prepared. This checklist is a recession proof list of all things you need to think about when you are buying your new home. 1. Check your credit If you are looking to secure a mortgage to buy your dream home, you need to make sure that there is nothing from your past life that will haunt you. You should do a credit check and make sure that there are no blemishes or faults that may impact on your creditworthiness. Before applying for finance you should set about repairing and faults of marks if possible. You can manage this yourself or talk with a credit repair specialist. 2. Set out a Budget What can you afford? Remember just because you can doesn’t always mean you should. Determine what you can comfortably afford by way of repayments, taking into account variations in interests rates in the future, ( they will not stay this low forever) any maintenance the property needs, and potential future development of the property including extras like landscaping, pools sheds etc. A mortgage broker or your preferred bank should be able to assist you to set a budget. It is wise to consult with these people before you go shopping for your new home. 3. Save for a deposit In Australia finance regulations mean that you must have minimum deposits saved to secure finance approval. When setting the budget for your purchase you should also take some advice from your Lender about the deposit that you will need to secure finance. Check out the Smart Money website for ideas on budgeting and savings https://moneysmart.gov.au/budgeting 4. Secure mortgage pre-approval Once you have your deposit saved, you should talk to your lender about a pre – approval. This step will allow you to shop with confidence. A pre – approval means that you have what it takes to move to the next level and that any offer you make is a serious bid. You should remember though that this is a pre- approval and not an unconditional loan approval . A lender will still need to ensure that the value of the property you want to purchase stacks up on their books before agreeing to lend you the money to buy. 5. Sit tight! Once you have your pre- approval in place stay in a holding pattern. Your pre- approval was given based on the life situation, earning capacity, and your current level of financial commitments. If you make any changes to these things ie change jobs, buy and expensive car, fall pregnant, there is a risk that the pre- approval will be revoked by your bank. 6. Make a wish list Before you go shopping for your house, consider what it is that you want in the house. Think about what your dreams are and what non negotiables you have. Be realistic. Whilst you may not be able to afford an Olympic sized swimming pool, a fence to keep your furry friend in could be essential. If you are buying a property with another person it can help to have an agreed shared list of must haves to help narrow the search. 7. Old or new Decide early if you will buy new or second hand. Each have their own advantages and disadvantages. New properties often need additional work like landscaping and driveways constructed that can add costs to the property that you have not factored in. Second hand properties, while established can have maintenance issues that need careful investigation to make sure you are ready to take that challenge on. There are grants for First Time buyers buying new or substantially renovated properties available in most states. You might also want to check out the federal government construction grant available until later this year 2020. 8. Look online https://www.realestate.com.au/buy or https://www.domain.com.au/ is a great place to start to help you to figure out what properties are available. Most real estate agents list the properties they have for sale on these websites. It can take some of the pressure off too when you are just starting to look around. 9. Find a real estate agent Find a real estate agent that you feel comfortable with and that you gel with. If the agent makes you feel intimidated, then this is not the right fit for you. Find someone that understands what you are looking for in the property. BUT be warned real estate agents are appointed by the seller of the property to sell their place. They work for the seller not for you. Ask for referrals from people you know, if a friend had a good experience with an agent, odds on you will too. There are plenty of good agents in our area 😉. 10. Visit open houses Poring over online listings is one thing; seeing the properties in person is quite another. Go to open homes and go to a few before you settle on a property. Map your strategy in advance, and while you’re in each home, take photos and notes so they don’t all run together in your mind. (Now, which one had the in-room fireplace again?) 11. Check out the neighborhood. If there is a park or a coffee shop nearby, go there and just sit and observe. How do the people in the community interact? How do they integrate? Can you picture yourself doing this EVERYDAY!! If the answer is positive then great, but if its not go look in another suburb. What is good for you is not the same for another person and we all want different things when we are home in our castle. 12.Make an Offer You have found the right house. It ticks the boxes and it meets your needs. Its in the right price range, now its time to make an offer. When making an offer think about the conditions that you might need. This should include finance if you only have pre-approval, a building and pest condition, particularly if the property is an older property so you can ensure the structural integrity of the house, maybe you are waiting for another property to sell. Maybe the seller promised to complete something before settlement like build a fence or fix a leaking tap? These things must make their way into the offer to purchase. Once a contract is formed it is often too late to go back and add in things you forgot but really, really need. Before you sign any contract, it is strongly recommended that you seek the advice of an experience solicitor or conveyancer, which brings us to our last and perhaps most important point…… 13. Find an experienced Conveyancer There are conveyancers and there are conveyancers. In Queensland at least, there is no such thing as a licensed conveyancer, and you must hold a current practicing certificate to conduct legal services. Other states like NSW and ACT allow licensed conveyancers to operate. But what is really the difference and why do I need a solicitor or a conveyancer? Depending on your state and the licensing regulations there is ultimately not really a difference in the function that a solicitor or conveyancer will perform during this process. It is the transfer of the property from the seller to you as the buyer, with some checks and balances along the way. Sounds simple enough but it’s really not. There are lots of trips and traps and you need an experienced solicitor that can anticipate these trips and traps and make sure you do not fall for them. We are not all created equal and the adage you get what you pay for is particularly relevant. You should shop around make enquiries and like the agent you should make sure you gel with who you will be working with. Ask the firms if they are prepared to review contracts before you sign them and get them to talk with you about the need to complete ALL searches. The Law Society prescribes a protocol as to how conveyancing should be completed, and you should ask the firm how they apply this protocol. Most of all get a conveyancing firm that knows the area, is familiar with it and can talk to you about any potential issues. New electronic conveyancing, already mandated in some states in Australia, makes the function of conveyancing simpler and more streamlined, but the important questions remain. You need to know you have the right person looking after it for you. At ACS Legal Solutions we want you to have the best experience buying your new home. We are offering a Price Match Guarantee for suitable properties to new clients. We think you deserve the best legal service and we are willing to put our money where our mouth is. Check out our website www.acslegalsolutions.net.au and facebook page for information.