The Family Law Act 1975 details the manner in which property settlement matters are dealt with in Australia. From 2009 the Family Law Act also applies to de facto couples.
Under the Family Law Act, property owned by married couples and de facto couples can be “adjusted” or divided between spouses so as to end their financial relationship.
It is important that you take steps quickly to obtain legal advice if you have not yet finalised your property settlement and:-
- You have finalised your Application for Divorce; or
- You believe your former spouse or partner is selling or disposing of assets.
The types of property that can be adjusted under the Family Law Act includes:-
- Real Estate;
- Interests in businesses or companies;
- Household furniture and contents;
It does not matter if any or all of the above types of property are owned in the name of one spouse only, a company, business or trust.
When a Court is considering how to divide property of a relationship, they adopt a four stage process:-
1. Determine the asset pool available for division (including assets such as those set out above) and determine the value of those assets in the pool (sometimes with the assistance of expert reports such as valuations);
2. Determine the contributions each party has made to those assets, before, during and after the relationship. Contributions that are considered are both financial and non-financial (including contributions made as homemaker and parent);
3. Determine whether one spouse or partner needs any adjustment in their favour for things such as a lesser earning capacity, poor health or having the care of children of the relationship under the age of 18 years; and
4. Consider whether after completing steps 1 – 3, the outcome arrived at is fair and reasonable.
As this is the process which will be adopted if your matter was being litigated, this is the same process that we would adopt during negotiations on your behalf and in advising you on likely outcomes.
It is important that after an agreement is reached, either in direct discussions between you and your former partner/spouse or after we have negotiated an outcome for you, that this agreement is formalised either by Consent Orders or a Financial Agreement.
Failure to properly formalise your property settlement leaves you open for a claim for property settlement well into the future.
Frequently asked questions regarding property settlement
What will my entitlement be?
During our initial consultation with you, we will obtain a detailed history of your relationship and the contributions made by each of you and the other party as well as information on the living arrangements for children (if any), each parties income, each parties health and other relevant factors to assist us in giving you guidance as to your outcome.
It is important to remember that property settlement is an entirely discretionary area of law, meaning that there is no fixed formula or standard calculations that can be done to advise you on your potential outcome. Where possible, we will give you a range of appropriate outcomes and strive to achieve those for you.
What sort of information will you need from me?
Parties to property settlement negotiations are obligated under the Family Law Act to provide full and complete disclosure of their financial circumstances. This is to ensure that all parties, when making a decision on a proposed outcome, are making that decision based on full information.
- To assist us in advising you and to ensure that you are complying with your obligation to provide full disclosure, the kinds of documents that we will need from you include:-
- Details of all real estate owned by you currently and as much information on the buying and selling of real estate during the relationship that you can provide;
- Details of your current income and provision of payslips to confirm;
- Details of historical income evidenced through tax returns and assessments;
- If you own a business, the business’ tax returns and assessments, financial reports, profit and loss statements;
- Bank statements for all accounts in your name or your name jointly with any other person;
- Details of motor vehicle registration and insurances; and
- Lists of any valuable furniture, such as antiques and collectibles.
Prior to your initial consultation with us, we will provide you with a full summary of the information that we would like you to gather and provide to us, if at all possible.
How soon after separation can I start discussing property settlement?
The ability to divide property of a relationship does not depend on being divorced (if you are married) or being separated for a certain period of time (if a de facto relationship). It is possible to commence those discussions immediately upon separation.
It is important to remember that time limits apply to both division of assets of a marriage or a de facto relationship. Those time limits are:-
- If you are married – you must commence property settlement proceedings in Court (i.e. if you can’t reach an agreement) within 12 months of finalisation of your Application for Divorce; and
- If you were in a de facto relationship – you must commence property settlement proceedings in Court (i.e. if you can’t reach agreement) within 2 years from the date of separation.
Do we consider current assets or assets as at separation?
The relevant point in time for consideration of the assets and liabilities of a relationship is as at the current time. That is, if you separated say, three years ago, but have not finalised your property settlement, we must consider the assets which exist now, not three years ago.
This is why it is important to finalise your property settlement sooner rather than later, to avoid a former spouse or partner benefiting from any assets that you have accumulated or any increase in value of assets post separation.
How can I formalise my agreement?
If an agreement is reached it can be formalised by way of Application for Consent Orders or a Financial Agreement.
If your matter is in the Court system and you reach an agreement, Orders can be made by the Court by consent and your matter would then be finalised.
If you require further information please contact us on 1800 621 071 or email [email protected].