Property Settlement

Property settlement fundamentals

Going through a separation or divorce is difficult, and property issues can be complex. Understanding the fundamentals is a great place to start.

What property is a part of the property settlement?

Many couples own/control property or assets together and share debts. These assets and liabilities will typically form part of the property that will ultimately be divided. This also usually includes superannuation.

On the other hand, one party may also have assets or liabilities they acquired prior to the relationship or after separation. Not all assets may be divided. 

How the property pool is divided depends on a number of factors, but it’s important to note that non-financial and indirect contributions to a relationship are taken into account. So while very often one partner might not have contributed as much financially, they will have contributed in other ways, and thes other contributions will be accounted for.

How is property divided under Family Law?

When it comes to your property settlement, you may agree on how to split your assets. In that case it is possible to finalise matters without a trial. You can make your agreement legally binding through a consent order, or you can make a binding financial agreement.

If you do not agree on how your assets should be divided you can apply for a property settlement in Family Court. The Court will then look at all the relevant assets and liabilities, apply factors and consider each party’s future needs.

Typically, one party is going to have greater needs in the future than the other. This may be due to age, health, income earning ability, childcare responsibilities, among other things. These factors are taken into consideration when determining how to divide a property pool.

Anytime you go to Court there are risks and you will have pre-action procedures to comply with beforehand. Always work with an expert property settlement lawyer before proceeding with any litigation or settlement negotiations.

What are the tile limits for property Settlement?

Property settlements are largely determined in the same way whether you were in a de facto relationship or a marriage. The only difference relates to time limits to apply for a property settlement.

• Divorce time limits. You have 12 months after a divorce becomes final to apply.
• De facto time limits. You have two years after the end of your de facto relationship to apply.

Property settlement disclosure

One of the main tasks involved in a property settlement is disclosure. During a divorce or separation, Family Law requires that a party faithfully disclose their ‘total direct and indirect financial circumstances’. This includes all sources of earnings, income, property, income, potential inheritances and any other financial resources.

Disclosure is required to be provided even for out of court property settlements.

Every property settlement is unique

There is no standard 50/50 division of assets, it is just not typically how things work under Family Law in Australia. – in fact that outcome is very rare. The Family Law Act states that property division must be ‘just and equitable’ and because of that, every outcome looks different in each case. How property is ultimately divided depends on the historical facts in each matter and the prospective needs of the parties and their children.

Understanding the property settlement process

Step 1: Identify & disclose your asset pool. Your first step is to identify and disclosure your financial assets as well as your liabilities. This must also include your superannuation.
Full and frank disclosure is an obligation under the Family Law Rules.

Step 2: Assess your individual contributions. Your individual contributions to the asset pool throughout the relationship will need to be assessed. This will include both financial and non-financial contributions,direct and indirect (such as childcare or unpaid work in a family business).

Step 3: Make future needs adjustments. This is primarily relevant when there are children involved or a significant difference in health, income or earning capacity. In those cases, the Family Court may make an adjustment in favour of one party.

Step 4. Negotiation. The need to negotiate with your ex during property settlement will be an ongoing requirement, but you will also need to negotiate prior to the formalisation of your property settlement, provided of course there are no safety concerns

Mediation is a great way to do this. And if you are unable to agree with your ex, and do need to seek a consent order from the Family Court, they will require that you have undertaken negotiation via some form of alternative dispute resolution first.

Step 5: Divide the property. This is the practical stage of settlement where property may be sold or superannuation splitting orders are made. This is also where the settlement agreement will be finalised, or the consent orders made by the court.

This seems like the end of the line, but it’s a time when issues can arise. Having legal advice and support is critical before finalising any agreements. Get in touch with our team for tailored advice that can help you get the best results for your situation.

Property settlement tips

Early advice can change outcomes

It is vital to get legal advice early on in a property settlement matter so you understand the risks and strengths in your situation and that your rights and interests are protected from the start. Advice now prevents regret later. 

Get the right team

Having the right people in your team helps. If you are overwhelmed – we can recommend  supportive counsellors. Often the financials are complex and confusing so we can refer you to and work with accountants and financial planners so you can made better  informed decisions- both now and for your future.