Separation and Everything that Follows

Separation is very difficult for all concerned, but having some information can help you understand the road ahead!

Melissa-Muir

Separation & Everything that Follows

Separation is a difficult time for everyone concerned, but having some knowledge of the road ahead, can make the process certainly a little easier.  In this podcast, Senior Lawyer, Melissa Muir, a Family Law Practitioner at Australian Family Lawyers steps you through path following separation.

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Transcript

Melissa: Separation is often a very emotional and stressful time for people. They are trying to cope with their own emotions, their children’s emotions and often times that of friends and family, who are all indirectly affected by the separation.

It is also a very confusing time for people. What should they do now? And what shouldn’t they do now. This is mixed with the “advice” (that I put in inverted commas) of well-meaning, but often misguided friends and family. These “bush lawyers” as I like to call them always come out of the wood-work when someone separates, passing on war stories of their next-door neighbour’s uncle’s brother-in-law’s second cousin’s story of separation.

It is therefore extremely important to get the right advice from a lawyer that specialises in the area of family law when you are thinking of separating or when you have separated.

Interviewer: So Melissa, what would you consider to be some of the most frequently asked questions from clients that you see regarding family law?

Melissa: Well one of the first things many clients will say is “I want to get a divorce”. This is from seeing a lot of American TV. To actually apply for a divorce in Australia you must be separated for a period of at least 12 months. This doesn’t stop you from resolving property and children’s matters within that time – and in fact I strongly recommend that you do start to resolve property and children’s matters prior to the divorce.

Interviewer: So property and children’s matters are separate to a divorce, are they?

Melissa: Yes, the divorce is really just an administrative process that officially terminates the marriage. The divorce, whilst having other legal repercussions such as with wills and inheritance and the ability to remarry, does not determine where the children are to live and how the assets and liabilities of the marriage are to be distributed.

Interviewer: You recommended that property and children’s matters are resolved prior to divorce. Why is this?

Melissa: Well in relation to children it is a really good idea that you and your spouse have at least discussed the future care arrangements for the children. If possible, it is preferable if some discussions have taken place at around the time of separation so that there can at least be an interim arrangement regarding who the children live with and how much time they can spend with the other parent. The finer and long-term arrangements can then be resolved later, perhaps with the assistance of a mediator and/or lawyers. In a nutshell there are no legal requirements to resolve children’s matters prior to divorce, but from a practical perspective it helps the parents and children know what is happening.

Interviewer: And what about property?

Melissa: There are certain time limits that apply in relation to property. Once the divorce has been granted, the parties have a time limit of 12 months in which to make an application to the Court for property orders. The time limit can be extended in certain limited circumstances, however there is no guarantee such an extension will be granted, so it is best to either hold off applying for the divorce, or make sure that an application is made to the Court before the 12-month time limit. In the case of de facto relationships, there is a time limit of 2 years from the date of separation.

From a practical perspective also, it is much easier for the lawyers and the Court to resolve property matters closer to the date of separation before the influx of time leads to complexities such as the depletion of assets or how to attribute credit to parties increasing the assets. Resolving property matters also assists parties to obtain financial certainty and move on with their lives.

Interviewer: You discussed separation. How do you decide who moves out of the family home?

Melissa: This is a very common question I am asked. No one necessarily has to move out of the family home, at least not initially. Separation can still occur even though you are living under the one roof – and for financial reasons many people do this until their property matters have been resolved or they have found alternate accommodation. Your spouse can’t force you to move out of the family home and similarly you can’t force your spouse to move out of the family home – even if the property is solely in your name or their name. The only way that one of the parties can be “forced” out of the home if they don’t leave voluntarily is to obtain an Intervention Order in the Magistrates’ Court, or an order for exclusive occupation in the Family Court or Federal Circuit Court.

Interviewer: So if one of the parties moves out of the family home, who pays the mortgage?

Melissa: Legally, those people who are listed on the mortgage have an obligation to pay the mortgage. Therefore, if it is jointly owned by the couple and/or both parties are named on the mortgage, the spouse who has moved out of the home still has a legal obligation to continue paying the mortgage.

However, for family law purposes it is usual that the spouse who stays in the home is responsible for the payment of the mortgage and all the outgoings of the property, given that the spouse who moved out often has the burden of relocation costs and the payment of rent.

Interviewer: What happens though if for instance the stay-at-home mother who has the care of the young children of the marriage stays in the home but can’t afford to pay the mortgage because she doesn’t work?

Melissa: If her husband refuses to pay the mortgage I may advise her to make an application to the Court seeking orders that at least on an interim basis he is to pay the mortgage. On the other hand, the husband may be able to credit part of the mortgage repayments towards reducing his child support obligation, so that is definitely something to look into. This is really just an interim solution until final orders are made.

Interviewer: What if you are the spouse who has moved out and your ex stays in the home but refuses to pay the mortgage?

Melissa: As above, you may need to apply to the Court to get an interim order that your ex makes the mortgage repayments. Alternate orders that could be sought are for your ex to move out of the home and you move into the home. Or you may even seek orders that the home be sold and the proceeds of sale can remain in a trust account pending finalisation of your property settlement. 

Interviewer: If you move out of the home, does that affect your entitlement to the property?

Melissa: I often have clients coming in saying that their spouse has told them that if they move out of the home they’ll get nothing. That is simply not true. If you move out of the home, whether voluntarily or by IVO or Court order, this does not affect your entitlement to the assets of the relationship. Even if you were the one to call off the relationship, or you were having an affair, this does not of itself affect your entitlement. This is what is commonly known as “no fault divorce”.

Practically it may make it harder to negotiate because it may reduce the other party’s motivation to settle, particularly if they are living in the home virtually rent or mortgage-free. For practical reasons therefore you may wish to consider staying in the home until final settlement. However, the emotional toll this can have can be very high, as it can be very difficult to live with your ex-partner following separation. There are also safety concerns to consider for both yourself and any children.

Interviewer: Is it true that once you start living together or get married that you are automatically entitled to half?

Melissa: That is a common misconception that I hear a lot. For a start, simply living together in a de facto relationship does not automatically give you any entitlement to property. The de facto relationship must have been for 2 years, or there is a child of the de facto relationship, or the applicant must have made substantial contributions (for example making a deposit on a property or mortgage repayments) and failing to make an order would result in a serious injustice to the applicant.

Even if this is satisfied, living in the de facto relationship or getting married does not automatically entitle you or your spouse to half of the assets, or even any of the assets. The first consideration is whether it would be just and equitable to make any order adjusting property interests in the first place. There are a number of further considerations that the Family Law Act sets out, such as who contributed both financially and non-financially to the assets, whether there are any children and each party’s income earning capacity. It is therefore very important to obtain independent legal advice from a family law specialist as to what your entitlements are under the Family Law Act, as every case is decided differently. Just because your friend may have obtained a certain outcome doesn’t mean you will get the same.

Interviewer: If you are able to reach an agreement with your spouse about property, do you really need to see a lawyer? Won’t this just increase costs?

Melissa: It is very important that even if you are able to come to an agreement with your spouse about the division of property that this is formalised into a legally enforceable document. Simply signing a piece of paper that you and your spouse prepare is not a binding document. If you do not formalise the agreement your spouse may be able to make a claim against your assets in the future. Even if you don’t own much now, your financial position could change – for instance you could get a better job, win Lotto, or you could receive a substantial inheritance. These are not necessarily safe just because they occurred after separation.

If the agreement is formalised by way of a Binding Financial Agreement, then yes, you do need to see a lawyer to obtain independent legal advice about the effect of the Agreement on your rights and the advantages and disadvantages of entering in the Agreement.

The other alternative is to enter into Consent Orders that are made in the Family Court. Whilst you do not legally have to engage a lawyer to do this, it is a very good idea if you do so. A lawyer who specialises in family law will know how to prepare the Consent Orders and what information to include and how to structure the Orders to ensure that your rights are protected. I have had clients come to me who tried to save money by preparing Consent Orders themselves. Years later the other party has made an application to the Court to set the Consent Orders aside on the basis that not all information was included in the Consent Orders. This has cost my clients literally thousands of dollars in legal fees to try and defend this matter at Court. If these clients had seen a lawyer to prepare the Consent Orders in the first place, yes there would have been some legal fees to prepare the documents, however it would have saved them thousands of dollars in the long run. Seeing a family lawyer early can therefore be a very wise investment.

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