Property Settlement

When a shared lifestyle ends, it can be a complex process working out how liabilities should be split and who should take ownership of various assets.

In family law financial matters, the division of property is not determined purely on the legal ownership of assets or the respective partners’ financial contributions, but also takes into account other ways that the parties have contributed and their future needs.

If you have separated from your spouse or de facto partner, we can help you formalise a property settlement that is in your best interests. We will ensure that your rights are protected and that you understand the future financial implications of your settlement.

When can I obtain a property settlement?

A property settlement involves dividing assets, financial resources and debts between a couple whose relationship has broken down. It legally finalises their financial affairs and enables the parties to move on with their respective financial activities. A finalised divorce is not required to proceed with the division of assets, and de facto couples are also eligible for property settlements under family law legislation.

The following time limits apply for property applications made to the Federal Circuit and Family Court of Australia:

for de facto partners, any court proceedings for a property settlement must be commenced within two years of separation
after a divorce is finalised, there is a twelve-month limitation period within which to bring court proceedings for a property settlement or spousal maintenance

What can be included in a property settlement?

Property includes a range of assets and financial resources for example:

real estate
bank accounts and cash
motor vehicles
trusts
superannuation
business and company interests
inheritances
loans and debts receivable

The ‘asset pool’ includes property that you entered the relationship with, property acquired during the relationship, and property acquired after separation, whether the asset is individually or jointly owned.

What steps are involved in a property settlement?

As in other areas of family law, the parties may come to an agreement between themselves. Most family law property settlements are finalised without going to court, which should only be considered as a last resort.

When parties come to an agreement, it may be tempting to simply leave the negotiations reached as an informal arrangement. Informal arrangements however are not binding, cannot be enforced, and may leave the parties vulnerable to future claims. Informal arrangements are also unlikely to facilitate certain stamp duty concessions that might otherwise apply when transferring assets such as real estate.

Accordingly, no matter how amicable your relationship is with your ex-partner, it is important to obtain legal advice to formally divide your property, and document your arrangements through consent orders or a binding financial agreement

Consent orders are filed with the court on application by the parties. Full disclosure is required in the application for consent orders and, if the court believes they are just and equitable, the orders will be made legally binding.

A binding financial agreement is a written agreement between the parties that must comply with certain formal requirements prescribed by legislation. The court is not involved in making or approving the orders however each party must receive independent legal advice before entering into a binding financial agreement.

Working out a financial settlement

There is no set formula for the distribution of property following the breakdown of a relationship in Australia. If your matter goes to court, the court will follow a process which is generally also applied when parties negotiate an out-of-court property settlement. The steps are:

determining the parties’ assets, liabilities, and financial resources
determining the parties’ respective direct and indirect financial contributions
determining the parties’ non-financial contributions to the relationship
assessing the parties’ future needs, considering their relative earning capacities, state of health, education, and responsibilities as primary carer of any children
determining what is just and equitable in consideration of all the circumstances

Spousal maintenance

After a separation or divorce, there may be an imbalance between the former spouses’ capacity to support themselves financially. For example, there may be a disparity in income because one spouse was the primary breadwinner during the relationship while the other gave up a career to contribute in other ways.

Spousal maintenance means that one person from a former relationship provides financially for the other. It applies to both marriages and de facto relationships.

An order for spousal maintenance is generally made for a limited time with the intention of providing a former spouse with some support while they re-establish themselves and set up for their future. Orders can be made on an urgent, interim, or final basis and can provide for payments to be made periodically (for example, fortnightly or monthly) or in a lump sum.

Spousal maintenance is separate from child support and child maintenance payments, which are paid for the benefit of a child. A party can be ordered to pay both spousal maintenance and child support, however, the court may take into consideration any child support payable when determining an application for spousal maintenance.

A spousal maintenance application requires careful preparation, and specific financial documents will be required as evidence. If you believe you may be eligible for spousal maintenance, we can assess your circumstances, and help you make an application and prepare the necessary evidence.

If you need assistance, contact [email protected] or call 02 9550 9588 for expert legal advice.