As a family law mediator, I often see property settlements delayed because parties don’t have the information they need. Missing key details about the asset pool can prevent them moving to the negotiation stage.
Gathering documents for mediation can be overwhelming and stressful but there are things you can do to be prepared. This guide will give you an overview of why certain kinds of information are important and a list of specific documents that are commonly required.
The information you need to bring to mediation depends on the assets and liabilities of the relationship and your individual circumstances. While it’s not the purpose of mediation to decide factual disputes, providing relevant documents to the other party can help resolve specific issues.
Property mediations follow the same stages as the court does when making a decision. Familiarising yourself with the process can help ground your understanding.
The main reasons for providing documents and information in mediation are:
· For each party to meet their obligation to disclose their financial circumstances
· To confirm or provide an accurate estimate of the value of assets and liabilities
· To provide a record of significant financial contributions by a party
· To provide detail about future needs of parties and how they are affected by factors such as earning capacity, disability and health
· To assist with practical issues such as the steps in selling a property.
Disclosure of financial circumstances
Anyone asking the court to make orders about their property (including consent orders) has a legal obligation to make full and frank disclosure of their financial circumstances. In practice, this means that each party provides the other with key documents about assets, liabilities, income and financial resources in their name or possession. Parties attending mediation might not be in dispute about a lot of this information, but providing it promotes transparency and trust.
What to provide
· Statements for each bank account in your name (including joint accounts)
· Record of regular income including wages, Centrelink benefits and rent from investment properties – either payer statements or bank account statements.
· If you have a business, a profit and loss statement or equivalent
· Tax return for previous financial year
· Statements showing any shares or investments, their current value and dividends
· Current statements for any mortgages, personal loans, credit cards or other debts (There is no need to include regular bills unless there are substantial arrears)
· The specific documents discussed below.
The asset pool
Confirming the value of assets and liabilities and the net value of the property pool is a crucial first step in property mediation. Parties need to know what they have to work with before negotiating how to divide their property.
The value of many assets and liabilities will be clear from the documents parties provide as part of the disclosure process (see list above). However, some assets such as real estate require specialised skills or further investigation to confirm or provide a reliable estimate of their value – and this can require a bit of ground work before mediation.
Real estate
The kind of valuation you get depends on the outcome you are seeking. If you want to sell the house, appraisals from real estate agents will give you an estimated range of the sale price.
If one party wants to buy out the other’s share, you might need a more accurate valuation from an independent valuer. The parties may also be able to agree on a value at mediation. Another scenario is that the house has been sold and the proceeds are in a trust account – or even distributed to a party who is sole owner, in which case settlement documents will be required.
The value of the property may also be affected by outstanding maintenance or repairs or unfinished renovations. Obtaining quotes can help parties factor in the cost of any necessary work, especially if a property needs to be sold.
It’s not always practical to complete these steps prior to mediation, but you can still gather information that can help you agree on the next steps.
What to provide:
· Market appraisals from 2-3 real estate agent appraisals OR options to choose from
· If an independent valuation is needed, names of 2-3 independent valuers to choose from
· Online search results for comparable properties that have recently sold in the area
· If the house has been sold, the settlement statement and if proceeds have been transferred to a party, the relevant bank statement/s.
Vehicles
A search on Redbook will provide an estimated range to allow for variations in features and condition of the vehicle. Again, you’ll need to provide additional documents relating to any repairs or if the vehicle has been sold.
What to provide:
· Redbook valuation for the relevant make and model of vehicle
· Written mechanic quotes or invoices for any repairs needed
· If the vehicle has been close to or after separation, Notice of Disposal and written record of sale price.
Superannuation
For specific kinds of superannuation such as defined benefit or self-managed funds, specialised skills are required to provide an accurate valuation.
Household items
These are usually assigned a global value which is an estimate of the amount they could be sold for. Items such as art or jewellery might require individual valuations.
Liabilities
The statements set out above are sufficient for showing the balances of any loans. But sometimes disputes can arise around the circumstances of debts and the following information may be helpful:
· Previous mortgage statements showing any redraws and who made repayments
· Where there are significant mortgage arrears, correspondence from the lender
· Written records of loans from family members or friends.
Financial contributions
Contributions are an important factor in working out how to divide the property pool in a way that is fair and equitable. In many cases, parties can agree at mediation that the financial and non-financial contributions they have each made over the relationship balance each other out rather than taking a ‘ledger’ approach. However, sometimes one party has made a significantly bigger financial contribution, especially if they brought assets into the relationship.
What to provide
· Written record of lump sums received by you such as compensation or redundancy payment or an inheritance
· Previous bank statements showing how the funds were spent
· Payment towards a major asset of the relationship such as a house deposit.
Future needs
Another important factor to consider in working towards settlement is the future financial needs of each party relative to each other. Age, health and disability are relevant to earning capacity as well as the expenses the party will need to meet in the future. While resolving some of these issues might be beyond the scope of mediation, often issues can be resolved simply by providing relevant information already at hand.
What to provide
· Medical reports and doctors’ correspondence
· Receipts and invoices for medical treatment and medication and
· Quotes for ongoing treatment including any necessary surgery
· Reports assessing capacity to work
Practical issues
Mediation can also include discussion about the practical steps needed to give effect to any agreement. In particular, there are many tasks that flow from decisions about real estate. A bit of research before mediation can help parties explore practical solutions and agree on the next steps.
What to provide
· If selling a property –agent appraisals/details of local agents, receipts or quotes for repairs/maintenance/cleaning
· If buying out other party’s share in a property – refinance pre-approval, details of independent valuers
· Bills for significant arrears for outgoings such as council rates, water rates and strata fees
· A list of items for one party to collect from the property if the other party is living there.
Conclusion
This guide is general and practical information only and I hope it helps you to obtain the documents you need to prepare for mediation. I strongly recommend that you get legal advice before negotiating a property settlement, whether before, during or after the mediation process. If you see a lawyer, having the key documents at hand helps them to give you the right advice.
Sometimes it’s not possible to have all the necessary information at hand at the time of mediation. But following this guide will equip you to resolve some of the issues and narrow the ones that need to be dealt with later.
Here's some tips to get you started
· Start the process of gathering information as soon as you know mediation is going ahead.
· Make a list of key disclosure documents and any others relevant to your circumstances
· Think about potential issues in dispute and the kinds of documents that might help resolve them and add them to your list
· Divide the list into document types or areas to give you a breakdown of tasks that you can spread out over time
· Many of the documents are available online which means you can save, send and share them electronically rather than printing them all out.
· Setting up a “property documents” folder means you will be able to access documents quickly and easily whenever needed.
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