Property Settlement (Divorce Settlement) in Family Law

Separated couples can reach a property settlement inside or outside of court depending on the circumstances.

Outside of the court room property can be divided in any number of different ways. If a couple can come to an agreement about their property adjustment after separation, your solicitor can then help you to draft up the agreement into consent orders. Once lodged with the court this agreement is as legally binding as a court order.

If however, a separated couple is unable to come to an agreement, either party can make an application to the court for a property settlement.

Whilst every matter is different and some property settlements are more complicated than others, the Family Law Act provides a basic framework to assist parties to decide how to divide their assets. But you should keep in mind that there is no set formula to determine your property settlement. You can reach agreement between yourselves on whatever terms you want. If the Court is asked to decide it will make an order after it has heard all evidence regarding your matter and your solicitor will communicate your needs and wishes to the court. The court will then make a decision of what it believes is a just and equitable decision.

 

What is considered property in a property settlement?

In family law, property involves all items of value relating to your relationship. All assets, liabilities and resources owned, shared and disposed of following separation by you and your former partner will be considered.

This includes:

  • Your bank account balances
  • Your house/s and your car/s
  • Any investments, shares or trusts that you are involved in
  • Any gifts or inheritances that you have received
  • Your superannuation
  • Any loans or other liabilities (including credit card debt)

 

Property Settlement Agreements

An agreement can be formalised in a number of ways, including through Consent Orders (Orders made by agreement) or a Binding Financial Agreement (an agreement that each of you enter into following the provision of legal advice). We strongly advise that you obtain independent legal advice before you attempt to formalise any agreements.

You can call our Sydney, Melbourne or Canberra offices using the following numbers.

Sydney: 02 9045 2600
Melbourne: 03 8376 7000
Canberra: 02 6115 9000

 

When can an agreement be made in relation to financial matters?

At any time whatsoever.

 

Property Settlement Applications

When you put in a property settlement application to the court you and your lawyer will fill out a financial statement and complete other legal documents which will disclose to the court all your property.

 

Property Settlement Process

The court will apply a 4-stage process to determine a just and equitable property adjustment.

Stage 1: The court must first determine the size and nature of the property pool. The property pool includes the couples assets, liabilities and superannuation in both individual and joint names. Both parties will be obliged to provide disclosure of their assets to the court and the other party. Depending on the size of superannuation involved, a couple’s superannuation may be placed into a separate asset pool.

Stage 2: The court will then look to both parties contributions to the relationship and family. Both financial and non-financial contributions are included. So if one couple has worked full time and one has cared for the children the nature of both contributions will be considered.

Stage 3: The court then looks to the future needs of both parties. A person’s future needs include their age, health and earning capacity after separation. The needs involved in caring for children after separation are also considered. This is where the court will discuss if spousal maintenance, child support or a one-off future needs payment is required.

Stage 4: Finally after considering the above three stages, the court must determine what would be a just and equitable property settlement.

 

What is the time limit for property settlement after divorce?

Unfortunately, it is not uncommon for an application for a property settlement to come many years after the fact of separation.

Generally, as you were married, the time limit for bringing an application for property settlement is 12 months from the date of a final divorce order. This means that if you never obtained a divorce order, the time limit never started.

The Court can allow a property settlement after 12 months in certain circumstances, taking into consideration factors such as:

  1. Whether the Applicant has a reasonable case to be heard;
  2. The financial and other circumstances of the parties;
  3. Any factors relevant to the issue of hardship;
  4. The length of the delay in bringing proceedings;
  5. Whether there was a reasonable explanation of the delay;
  6. Whether the Respondent will suffer prejudice as a result of that delay if permission were granted.

 

What is the time limit for property settlement after separation (breakdown of a de facto relationship)?

Unfortunately, it is not uncommon for an application for a property settlement to come many years after the fact of separation.

As it was a de facto relationship, the time limit for bringing an application for property settlement is 2 years from the date of your final separation.

The Court can allow a property settlement after 2 years in certain circumstances, taking into consideration factors such as:

  1. Whether the Applicant has a reasonable case to be heard;
  2. The financial and other circumstances of the parties;
  3. Any factors relevant to the issue of hardship;
  4. The length of the delay in bringing proceedings;
  5. Whether there was a reasonable explanation of the delay;
  6. Whether the Respondent will suffer prejudice as a result of that delay if permission were granted.

 

How will inheritances be treated in property settlements?

The way an inheritance will be treated depends on a number of factors including:

  1. When the inheritance was/is expected to be received?
  2. How much the inheritance is in comparison to the asset pool?
  3. Has the other party made any contribution to the inheritance (for example caring for the person)?

The Court can treat the inheritance as an asset (if it has been received), or a financial resource (if it is expected to be received). If the inheritance is not “sure”, and is many years away from being realized, it may not have any bearing on the property settlement.

It is important to disclose the details of any inheritance, because if you try to conceal it, this may provide the other party with grounds to make an application for any property settlement agreement to be set aside.

 

Property Settlement Lawyers

Farrar Gesini Dunn is an expert family law firm with offices in Sydney, Melbourne and Canberra. We’re tough, we’re expert but most of all we treat our clients as individuals. At FGD we are passionate about keeping you in control of your own property settlement. After meeting with you for an initial appointment, we can begin to discuss a property settlement plan which focuses on you and your needs.

Property Settlement Lawyers in NSW
phone (02) 9045 2600

Property Settlement Lawyers in VIC
phone (03) 8376 7000

Property Settlement Lawyers in the ACT
Phone (02) 6115 9000