Is it possible to include legal fees already paid in the asset pool?

In protracted legal proceedings, parties can pay or accumulate substantial legal fees. The question of whether legal fees can be added back into the asset pool in a property settlement is often a relevant consideration.

Often one party has to use funds received from the sale of an asset and the other party pays legal fees from their income.

The Court’s position is that if legal fees are paid from funds that existed at separation and both parties had an interest in these assets, then the funds used should be added back into the pool of assets to be considered for property settlement.

As a result, the party who pays legal fees from the sale of an asset may receive a reduced amount in the property settlement since the legal fees paid are deemed part of the property pool that party had already received.

This is in contrast to the payment of legal fees from funds generated by a party post separation from their own income which should not be added back.

Ultimately, each case depends on its own facts, but this issue is common and needs careful consideration.

The team at Clelands Lawyers are always available to assist you with any of your legal requirements, contact any of our knowledgeable professional Family Law team members at Clelands Lawyers or call 8177 5888.