If you separate, it is important to finalise your affairs formally. Doing so brings financial certainty and closure so that you can get on with your life.
Property Settlement can be done either by Court Order or via a (Binding) Financial Agreement.
The same process applies whether you are married, or in a de facto relationship including a same sex relationship.
The relevant legislation is the Family Law Act 1975.
Preliminary Legal Issues
- In a de facto (including same sex) relationship, there is a limitation period of two (2) years from the date of separation to apply to the Court for a Property Order including a Consent Order (this can be extended in certain circumstances);
- For married parties, the Application for property Orders requires to be sought within 12 months of the Divorce going through. However, parties are free to formalise and conclude their property settlement arrangements before a Divorce is filed.
What The Law Looks At
- The law first asks whether any property adjustment is actually appropriate or whether a settlement should involve everybody keeping what they have;
- If a property adjustment is considered necessary, the law then identifies what the pool consists of – assets, superannuation, resources, liabilities and so on;
- Next a Court looks at the financial and non-financial contributions of each party to the relationship (housework, running the home, looking after children, and this is given significant weight by a Court);
- The law also examines the future needs of both parties;
- The remaining step is for the Judge to be satisfied that the proposed outcome will actually be fair and equitable overall for both parties.
Things To Consider:
Among the things the law looks at are the following:
- The length of the relationship;
- The age of the parties;
- The health of the parties;
- The income earning capacity, property and resources of the parties;
- Who will be caring for any children under 18;
- Each party’s needs to provide self-support;
- The parties’ pension entitlements;
- The parties’ child support obligations;
- What would be a reasonable standard of living after separation;
- The effect that any proposed Orders might have on creditors;
- If either party has a new partner – the financial circumstances of that new relationship;
- Any other things that the Court considers to be relevant.
As lawyers we sit down with our clients at the outset and take a history. That history includes questions about:
- What each party brought at the start of the marriage, eg. shares, bank accounts, real estate and so on.
- Each party’s contributions from income during the marriage.
- Whether there have been any winnings or packages or payouts or compensation or inheritances or gifts from one side or the other during the marriage.
- Who has undertaken house work, child care and generally made the non-financial contributions for the welfare of the home and family.
We also take the time to work through how our client sees things playing out in the future, in relation to finance including Spousal Maintenance and Children’s Orders.
No two cases are ever the same. Each case is unique and is dealt with on its own merits after a careful analysis of all of the above matters.
Duty Of Disclosure
When finalising property arrangements, each party has a duty to fully and frankly disclose all of their assets, resources, superannuation and liabilities to the other. If a party fails to do so, then that party can face very serious consequences. Importantly, any Court Orders (including Consent Orders, or Financial Agreement) can be set aside by the Court later if a party has failed to be totally honest. This can lead to a whole re-working of the property settlement and can result in a Costs Order against the non-disclosing party.
Finality And Closure
Even if parties are in complete agreement on the property settlement arrangements and go on to divide assets up amicably together, these arrangements are never binding and final unless documented in a (Binding) Financial Agreement or Consent Court Orders.
So, if some years later one party changes his/her mind and wants to revisit arrangements, there is nothing to stop them trying. That can have drastic financial and emotional consequences if a party has perhaps paid out a mortgage or re-established him/herself on the erroneous assumption that all is watertight.
For that reason, parties should always formalise arrangements at the conclusion of a relationship in a legally binding way.
Most Property matters are settled via Consent Court Orders. Even in cases where Court proceedings have actually been started, Consent Orders can still be agreed. Over 90% of Court-issued Applications actually go on to settle via Consent Orders before a Final Hearing.
Many Property Consent Orders can be negotiated out of Court altogether. An Application and Proposed Orders is simply sent to the Court for Court approval. Neither party has to attend Court and nor do their lawyers. The Consent Order option is the most cost-effective and often brings about speedy resolution for both parties.
Our Family Lawyers at Pearce Webster Dugdales deal with property settlement matters every day. Please let us know how we can assist you to lock in financial security for your future.