When a marriage or de-facto partnership ends, a property settlement after separation is an important component of the legal Property Settlement Process because it guarantees that property and funds are shared equally between both parties. But parties often find it hard to settle property disputes amicably.
To learn what are the recourses available to a disputed family law property settlement, you need to first understand what a property settlement means.
What is a property settlement?
A property settlement is the legal split of your relationship’s common property. Whether you are married or in a de-facto partnership, you are entitled to a property settlement, when the relationship ends. A property settlement is a different legal process from divorce, and it can often take place before or after the divorce is finalised.
The goal of a property settlement is to resolve all of the parties’ financial difficulties. Parties are encouraged to reach their own property settlement agreements in Australian family law, as this is a more efficient and less stressful procedure.
The Family Law Act 1975 and the Family Court Act 1975 lay out the rules for settling property following a divorce for married persons and those who were in a de facto relationship. Those in de facto relationships must fulfil specific requirements laid out in the Act in order to be eligible.
What is considered property in a divorce or separation?
Property is made up of assets (what you own) and liabilities (what you owe) that you own alone, with another person, or through a family trust or firm. The following items may be included in a property settlement:
- Real estate, such as the family home,
- Money stored in cash or in bank accounts
- Insurance policies
- Assets, such as automobiles, furniture, jewellery
- Debts, such as mortgages, loans, and credit cards
What happens if you need to go to Court?
When persons reach their own property settlement agreement and file an Application for Consent Orders (Form 11) with the Family Court, the court must be satisfied that the arrangement is fair before making orders in accordance with it.
However, if you can’t come to an agreement within the property settlement time limit, you may have to go to court to get orders. This will need a longer hearing, which will cost more, take longer, and be more unpleasant. A hearing may take months or years to complete before a court can issue a ruling.
The four-stage divorce property settlement process explained below will be used by the court to make its judgement regarding the matter:
- Determine the worth of all property acquired throughout the partnership or marriage (including debts). This can include items acquired before or following the marriage/partnership.
- Considering each party’s financial and practical contributions to the relationship, which is their entire property pool, such as:
- property owned before the relationship
- improvements to property
- contributions as a homemaker and parent
Since the worth of a person’s contributions as a parent is tough to quantify. Instead, the legislation stipulates that these contributions must be equivalent to or greater than a person’s financial contributions.
- Considering both parties’ future requirements, including your ability to earn and support yourself. It will take into account the other elements mentioned in the statute, such as:
- how much money each person could earn in the future,
- their age and health,
- the care and financial support of their children
- their responsibility to look after other people, and
- the length of their partnership/relationship
- Determining an equitable asset division between the two parties.
When determining what constitutes a fair allocation of property, the law considers all of these factors. It doesn’t take into account who ended the relationship.
Why should you seek legal help?
Before making an application for a property settlement, family law courts expect applicants to make a sincere attempt to resolve their dispute. You can go to Family Dispute Resolution or another mediation program or hire a lawyer to assist you in addressing your issue.
Even if you are divorcing amicably, contacting a lawyer as soon as possible helps you receive the most accurate evaluation of what property you possess and what rights you have. You could need help to prevent the property from being sold before it can be divided or to investigate income or assets that your partner hasn’t revealed.
Remember if your property arrangement isn’t legally finalised, you’re taking a major risk since your former spouse might change their mind at any time – and want more property than you initially agreed on. Even if you want to distribute your assets without going to court, it is critical that you get legal counsel. Get in touch with the team at AJB Stevens today to discuss your requirements or concerns. We’re always here to help.