How is property divided after separation?
A property settlement after the breakdown of a marriage or de facto relationship can be resolved by consent orders, financial agreement or proceedings in the Family Court.
The Family Law Act 1975 (Cth) encourages separating couples to settle property disputes as amicably as possible, particularly if relationships will be ongoing, such as where children are involved. The more difficult the parties are, the more expensive the process, depleting available assets and adding stress to an already-difficult time.
We recommend you read our section on ‘Financial Agreements and Consent Orders’ and ‘De facto Relationships’ which may also be of interest.
What are the first steps?
Different time limits apply for commencing Court proceedings, depending on whether you are still married, divorced or have been in a de facto relationship. Generally, proceedings must be commenced within 12 months of finalising a divorce and within 2 years of separating from a de facto relationship. You do not need to be divorced before affecting a property settlement.
If you have recently separated you should meet with your Lawyer promptly to clarify dates so that if proceedings become necessary, relevant timeframes can be diarised. During our first meeting, we will obtain comprehensive details from you about your relationship, children, assets and liabilities.
Usually, we will ask you to bring in various documents such as bank statements, superannuation and loan account details. We appreciate that it may take some time to get this information which can be provided as it becomes available.
It is important to give full disclosure and provide accurate information during property proceedings. We will gather this information and the relevant facts to build your case to achieve a fair settlement or to proceed to court if the matter does not settle amicably.
If you and your ex-partner have already reached an agreement on how your property should be divided then we can discuss your rights, how the proposed agreement will affect you, and the most appropriate way for it to be documented.
What if we don’t agree?
If there is no agreement on how to divide your property, we will attempt to negotiate a settlement through your ex-partner’s Lawyers. In most cases parties are required to cooperate and make a genuine effort to resolve their differences and take part in dispute resolution processes. With the help of the parties’ Lawyers, this will often result in an agreement in principle which can be documented and, if necessary, endorsed by the Court.
If no agreement is reached, or the matter is very complex, going to Court may be necessary. In this event we will, wherever possible, minimise the issues in dispute to avoid excessive fees.
What does the Court consider?
In determining a division of property, the Family Court uses a four-step process:
- The Court identifies the assets, liabilities and financial resources of the parties. This includes real and personal property, furniture, motor vehicles, investments, cash, shares and insurance policies. Superannuation is also included and may be ‘split’ between the parties to give effect to property orders.
- Contributions made between the parties are assessed. This includes financial contributions such as assets brought into the relationship and the parties’ respective earnings, and non-financial contributions such as the care and welfare of the family.
- Each parties’ future needs are evaluated taking into account their relative earning capacities, state of health and the need of the primary carer of children to provide a suitable home.
- The Court will determine, in all of the circumstances of the case as a whole, the orders that are ‘just and equitable’.
Generally, the starting point will be an equal distribution of assets before consideration of the various factors. The Court’s determination is discretionary and no two cases are alike. Within each of the four steps there are numerous other considerations.
No matter what process is used, it is important to formalise your property settlement to finalise your affairs and obtain stamp duty exemptions on the transfer of any property.
If you have recently separated from your spouse or de facto partner, our experienced Lawyers will explain your rights and assist you to achieve a fair division of property, allowing you to move on with your life.