When that first bill comes in from your solicitor, how do you pay it? When you are in a relationship money is joint and bank accounts are joint. Where does that money come from to pay your first solicitor bill after separation? It is very tempting to take that $20,000 from the joint savings account to pay your solicitor fees.
The legislation provides a starting point for parties to consider where the money comes from to pay your solicitor bills. Section 117 provides that each party to a proceeding is to bear their own costs. Meaning that the money to pay your solicitor shouldn’t come from the property pool that needs to be divided. ie, your solicitor costs can’t come from the joint bank account.
But what happens when it is taken from the property pool (say that $20,000 sitting in a joint savings account), the case law says that money needs to be added back into the property pool.
What if you choose to take a loan out to pay your solicitor bills. Can that be included in the balance sheet as a liability? The case law very clearly says no. It cannot be included as a liability in the property pool:
The simple answer is legal fees cannot come from the property pool, or you risk having to account for them as an add back to your detriment.