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Property Settlements

The complexity of dividing property after separating can be influenced by the length of the relationship, the type and value of assets held, and the willingness of both parties to work towards a solution. If you are separating from a long-term relationship and have accumulated wealth or business interests, dividing assets and liabilities can be more complex than say, splitting a few basic assets from a short-term relationship. You can make arrangements to divide your property as soon as you separate – if you are married, you need not wait until you are divorced.

What is a family law property settlement?

A property settlement involves the division of assets, liabilities, and financial resources between a couple whose relationship has broken down. It applies to separated spouses and de facto partners and requires consideration of all property whether held jointly or individually, including superannuation, which may be subject to a splitting order.

In most cases, you do not need to go to Court, and an agreement can be reached and finalised with the assistance of your family lawyer and/or through negotiation/mediation. Agreements can be formalised and made legally binding through a financial agreement or consent orders.

Financial agreements (also known as binding financial agreements or post-nups) operate like a contract between a separated couple. They set out how assets and liabilities will be divided, and details of how the agreement will be implemented, for example, by closing bank accounts, selling assets, paying off loans, and transferring funds. To be valid, the agreement must meet strict formal requirements and the parties will need independent legal advice. Court intervention is not required to make a financial agreement.

Consent orders are generally considered a more formal way of finalising your property settlement as they are filed with and approved by the Federal Circuit and Family Court of Australia. An application with the proposed orders is lodged with the Court and if the terms of the orders are considered just and equitable, the Court will grant them, and the orders will be legally binding. Typically, you will not need to attend Court for the orders to be approved.

Going to Court – how is a fair agreement reached?

There is an established process in cases where the parties cannot agree on a property settlement. Initially, the parties will be required to make a genuine effort to resolve their dispute through negotiation, mediation or family dispute resolution. If a settlement is not achieved, then an application for property orders can be filed with the Federal Circuit and Family Court of Australia. The application must be made within twelve months of a divorce becoming final or within two years of a de facto couple separating.

The matter will be set down for hearing and a legally binding decision will be made by the Court which will consider:

  • The asset pool – a calculation of the total assets owned by both parties, including property, shares, bank accounts, investments, motor vehicles, jewellery, business interests, superannuation, etc. The asset pool includes things you brought into the relationship, acquired during the relationship, and purchased after separation.
  • The financial and non-financial contributions from both parties – financial contributions refer to income, property, and other financial resources that each person brought into the relationship. Non-financial contributions include activities such as homemaking, childcare, and renovations.
  • The future needs of both parties – the aim here is to ensure a fair outcome by providing for the reasonable needs of both parties into the future – factors such as each party’s age, health, capacity to earn money, and parental responsibilities are considered.

The Court will make orders based on what it considers is fair and reasonable to both parties in all circumstances.

Dealing with the complexities of a property settlement is stressful but the consequences of not doing it properly can impact the rest of your life. No matter the value of your assets it is important to formalise the division of your property so you can each go your separate ways financially and be protected from future claims. Our experienced family lawyers will provide considered advice, protect your legal interests, and help you reach a workable agreement while keeping you out of the courtroom wherever possible.

If you need help, contact [email protected] or call 03 8672 7510 for a confidential discussion with one of our friendly and experienced family lawyers.