For Professional Advisers : Koffels Solicitors and Barristers

Information for accountants, financial planners, corporate solicitors, and private wealth managers

If you advise individuals with significant assets, business interests, or complex financial arrangements, some of your clients will at some point face a family law matter. When that happens, the quality of the family law advice they receive will affect not just the legal outcome but the financial structures, tax positions, and business relationships you have helped them build.

This page is written for professional advisers who want to understand when a family law referral is warranted, what to expect from the process, and how Koffels works with referring professionals. It also covers the technical issues that arise most frequently at the intersection of family law and the work of accountants, financial planners, and corporate solicitors.

If you would like to discuss a client’s situation before making a referral, we welcome that conversation. It is confidential and carries no obligation.

When to refer a client for family law advice

The most common reason advisers delay referring clients for family law advice is that the client is reluctant to engage with the legal process — they may hope the situation will resolve itself, or they may be concerned about cost, conflict, or the finality that legal advice implies. That reluctance is understandable, but it can be costly.

Early advice matters in family law for several reasons. The duty of financial disclosure attaches from the moment proceedings are reasonably contemplated, which means that asset movements made after a breakdown — including distributions from discretionary trusts, changes to business structures, or transfers of property — may need to be disclosed and can be scrutinised by the other party’s lawyers and forensic accountants. Decisions made in the early stages of a separation, without legal advice, frequently create problems that are expensive to undo.

As a general guide, a client should be referred for family law advice when any of the following apply:

A significant relationship has broken down or is at serious risk of doing so, and the client has substantial assets, business interests, or structured wealth.
A client is entering a significant relationship and has assets, a business interest, or inherited wealth they want to protect — a Binding Financial Agreement may be appropriate.
A client has received a letter of demand, a subpoena, or any formal legal correspondence in connection with a family law matter.
A client has been asked to sign any document — including a financial agreement, consent orders, or a parenting plan — in connection with a separation, without yet having their own independent legal advice.
A client proposes making significant changes to their asset structures, trust distributions, or business arrangements at or around the time of a separation.
A client has received notice that their superannuation fund has been served with a splitting order or flagging notice.

If you are unsure whether a client’s situation warrants a family law referral, call us. We are happy to have a confidential preliminary conversation to help you assess whether legal advice is needed and, if so, how urgently.

Disclosure obligations: what advisers need to know

The duty of full and frank financial disclosure in family law proceedings is comprehensive and extends to information and records held by the client’s advisers. Where your client is in family law proceedings — or where proceedings are reasonably in contemplation — you should be aware of the following.

Subpoenas to third parties

In contested family law matters, it is common for subpoenas to be issued to third parties, including accountants, financial planners, banks, and company registries. A subpoena requires the recipient to produce specified documents to the court. If you or your firm receives a subpoena in connection with a client’s family law matter, you should seek your own legal advice on your obligations under the subpoena before producing any documents, and notify your client promptly.

The scope of documents that can be sought by subpoena in family law proceedings is broad. Financial records, trust accounts, company records, correspondence, and advice given to the client regarding financial arrangements are all potentially within scope. The fact that documents relate to the affairs of entities other than the parties — companies, trusts, self-managed superannuation funds — does not necessarily put them beyond the reach of a subpoena.

Trust and company records

Where a client holds interests in discretionary trusts or private companies, the financial records of those entities are likely to be relevant to the family law proceedings. Courts have broad powers to order the production of company and trust records, and to examine the controllers of those entities. Advisers who have provided services to the trust or company — rather than to the individual client — should take particular care to understand their own obligations when subpoenas or court orders are received.

Confidentiality and privilege

Legal professional privilege protects confidential communications between a client and their lawyer made for the dominant purpose of obtaining legal advice or for use in litigation. Accountants and other non-legal advisers do not have the same privilege, and documents held by accountants — including advice, correspondence, and working papers — are generally not privileged and can be required to be produced in response to a subpoena.

Where a client has received legal advice that has been shared with their accountant, the question of whether privilege has been waived by that disclosure requires careful analysis. If you receive a subpoena and are uncertain about privilege, seek legal advice before producing documents.

CGT and stamp duty in property settlement

Property transfers made as part of a family law property settlement are subject to specific CGT and stamp duty provisions that differ from ordinary property transfers. Understanding these provisions is essential to structuring settlements efficiently and avoiding unintended tax consequences.

CGT roll-over relief

The Income Tax Assessment Act 1997 provides automatic roll-over relief for assets transferred between spouses — including former spouses and de facto partners — pursuant to a court order or a binding financial agreement under the Family Law Act 1975 (Cth). The roll-over defers the CGT event: the transferring spouse is taken not to have made a capital gain or loss on the transfer, and the receiving spouse takes the asset at the transferring spouse’s cost base.

Roll-over relief applies automatically where the conditions are met — it does not need to be elected. The conditions are that the transfer is made in accordance with a court order or binding financial agreement, and that the asset is a CGT asset. Most assets transferred in property settlement — real property, shares, trust interests, business assets — will satisfy these conditions.

Roll-over relief does not eliminate the CGT liability. It defers it to the receiving spouse, who will crystallise the gain when they subsequently dispose of the asset. The cost base carried over may reflect a very long ownership period and a correspondingly large embedded gain. This should be taken into account when advising clients on the relative value of different assets in a settlement — an asset with a low cost base is worth less on an after-tax basis than its market value suggests.

Situations where roll-over does not apply

Roll-over relief is not available in all circumstances. It does not apply to transfers made pursuant to informal agreements that have not been formalised as court orders or binding financial agreements. It does not apply to transfers between parties who were not in a marital or de facto relationship, such as transfers to companies or trusts controlled by one party. And it does not apply where the asset is trading stock rather than a CGT asset.

The expat and foreign residency issues discussed in our article on Australian expats and family law are also relevant here — roll-over relief in a cross-border context requires careful analysis.

Stamp duty exemptions

All Australian states and territories provide stamp duty exemptions for property transfers made pursuant to family law orders or agreements. The scope and conditions of the exemption vary by jurisdiction. In NSW, the exemption under the Duties Act 1997 applies to transfers made in accordance with a court order or financial agreement under the Family Law Act. The exemption must be claimed and the relevant documentation provided to Revenue NSW — it is not applied automatically.

Where a settlement involves property in multiple states, the stamp duty exemption must be claimed in each relevant jurisdiction, with documentation requirements varying between them.

Superannuation splitting

Superannuation splitting in family law proceedings requires coordination between the family lawyer and the client’s financial adviser or accountant, particularly where the fund is a self-managed superannuation fund.

How splitting works

A superannuation splitting order — or a superannuation agreement under the Family Law Act — operates by creating a new interest in the non-member spouse’s name, either within the same fund or by way of rollover to a new fund. The order does not give the non-member spouse immediate access to the funds — the superannuation preservation rules continue to apply to the split interest, and the non-member spouse can only access the funds when they satisfy a condition of release.

Before a splitting order can be made, the trustee of the superannuation fund must be given procedural fairness — served with the application and given the opportunity to provide information about the fund and the member’s interest. Failure to comply with the procedural requirements invalidates the splitting order.

SMSFs and splitting

Self-managed superannuation funds require particular attention in property settlement. The SMSF’s trust deed governs how the fund operates, and a splitting order must be implemented consistently with the deed and with the Superannuation Industry (Supervision) Act 1993. Where the SMSF holds illiquid assets — real property, business assets, unlisted investments — implementing a split may require the sale or restructuring of those assets, with CGT and other consequences that need to be carefully modelled in advance.

When both parties are members and trustees of the SMSF, separation raises governance issues that must be resolved promptly. A trustee who is no longer acting in the best interests of all members may be in breach of their trustee obligations. The fund’s auditor and accountant should be engaged early where an SMSF is involved in a separation.

Trust structures and family law

For advisers who manage client relationships involving discretionary trusts, family law proceedings create specific risks and obligations that warrant proactive attention.

As discussed in the property settlement hub, courts have broad powers to treat trust interests as property or financial resources in family law proceedings — including where the party does not formally control the trust. The leading cases of Kennon v Spry [2008] HCA 56 and Woodcock & Woodcock [2021] establish that courts will look beyond formal structure to assess the substance of a party’s relationship with a trust.

For advisers, the practical implications are: trust distributions made after separation may be scrutinised; changes to trust deeds or the appointment of new trustees around the time of separation may be subject to challenge; and financial disclosure obligations extend to trust interests regardless of whether the party is the formal trustee or appointor.

If you are the accountant or financial adviser to a trust whose controller is going through a separation, consider whether you need to take your own advice on your obligations, and ensure that any instructions you receive from the controller to make changes to the trust structure or distributions are consistent with the trustee’s obligations and are appropriately documented.

Binding Financial Agreements: a planning tool

For clients entering significant relationships, Binding Financial Agreements are increasingly relevant as part of broader financial and estate planning. Advisers who are aware of this tool and can identify when it is appropriate to use it perform a genuinely valuable service for their clients.

BFAs are relevant in a wider range of circumstances than many advisers appreciate. Beyond the classic pre-nuptial scenario, they are appropriate for clients entering second relationships with children from prior relationships, for business owners whose co-founders or shareholders have an interest in ensuring that equity is not exposed to relationship breakdown, and for clients with significant inherited or pre-relationship wealth who want certainty about how that wealth would be treated in the event of separation.

The interaction between a BFA and estate planning — particularly testamentary trusts and family trusts — is an area where coordinated advice from the family lawyer and the estate planning adviser can yield outcomes neither could achieve independently. A BFA that is designed in isolation from the client’s estate plan may create inconsistencies that undermine both documents.

Further reading: Binding Financial Agreements: the Koffels hub page →

How Koffels works with referring professionals

We understand that referring a client to another firm involves trust, and that the quality of the experience reflects on the referring adviser as much as on the legal team. We take that seriously.

When you refer a client to Koffels, you can expect the following. We will promptly confirm whether we can act, including any conflict checks. We will keep you informed of significant developments where that is appropriate and where your client consents. We will not create unnecessary conflict or encourage litigation where a negotiated outcome is achievable. And when the matter concludes, we will return the client relationship to you.

We act for a limited number of clients at any time in the family law practice. That is a deliberate choice — it allows us to give each matter the senior-level attention it requires. Where a matter is outside our capacity or involves a conflict, we will tell you promptly and, where possible, suggest an alternative.

If you would like to discuss a client’s situation confidentially before making a referral, please contact us directly. There is no obligation, and the conversation is privileged.

Make a referral or discuss a client matter

We welcome referrals from accountants, financial planners, corporate solicitors, and private wealth managers. If you would like to discuss a client’s situation confidentially, please use the form below or call us directly.

This page is intended as a general reference for professional advisers only and does not constitute legal advice. Family law, tax, and superannuation matters are highly fact-specific. Koffels Solicitors and Barristers, Level 23 Angel Place, 123 Pitt Street, Sydney NSW 2000.