Following a relationship breakdown comes the often-complex task of property division. Here, our Melbourne-based Family Lawyers explain the basics of property settlement to help guide you – whether your situation is amicable, hostile or somewhere in between.
What is Family Law?
In Australia, the family law system, including the Family Law Act 1975, exists to assist people in resolving legal aspects of family relationship issues, including relationship breakdowns. This jurisdiction covers property settlement among other areas, including divorce, parenting orders and spousal maintenance.
The family law system in Australia encourages people to come to an agreement without going to court. Regardless, obtaining legal counsel can help you navigate the process, ensuring the outcome is fair and that all agreements made with your ex-partner are legally binding.
What is property settlement?
Divorce is an entirely different legal matter to property settlement. Divorce is the legal end to a marriage, which the allows either party to marry somebody else if they choose to do so.
Within the context of divorce or separation, property settlement is an arrangement made between the former partners about the division of assets, financial resources and liabilities.
Since divorce and property settlement are two distinct legal matters, you do not need one to have the other. It is worth knowing that if you do decide to obtain a property settlement after divorce, however, there is a 12-month time limit in place to do so.
Note: It is also worth mentioning here that property settlement and divorce are also separate from parenting arrangements and orders.
What is defined as property?
You would be forgiven to assume that “property” refers to real estate or the family home. Within the context of family law and property settlement, “property” is defined as all financial assets possessed either individually or by both parties. In more simple terms, property is essentially anything of monetary value acquired during the relationship. It can also refer to anything of value acquired prior to the relationship, and in some cases during separation.
Another important thing to remember is that “liabilities” are also included in property settlement. This means that any debt that you or your partner have may be considered for division.
Some examples of property include, but are not limited to, real estate, inheritances, investments, superannuation, mortgages, credit card debts and even items such as cars, tools and jewellery.
Once grouped together, each party’s property (both assets and liabilities) is referred to as the “asset pool”. Regardless of who you believe owns what, or who owns what according to any existing documentation, your asset pool should contain any and all items that could be deemed to fall under the property umbrella.
Will I need to go to court?
Not necessarily. In fact, it is largely best if you and your ex-partner can reach your own agreement without going through the court system – assuming that it is safe for you to do so. Coming to an agreement on your own will save both parties time, money and stress.
If you do agree on division of assets, you can apply for consent orders or a financial agreement to formalise the decision and make it legally enforceable. If there are some issues that you and your ex-partner cannot agree on, there are options for mediation or dispute resolution to help resolve these.
Following this, if there are still issues of property settlement that cannot be resolved, then you can apply to the Family Court. In any of these cases, it is important to seek legal advice. This is to ensure you understand what you are entitled to and that all decisions are bound by law.
What is the process of dividing property in court?
If your property settlement cannot be settled outside of court, there is a four-step outline of how the system determines the division of assets.
Valuing assets: As outlined above, all assets (anything of value) and liabilities are identified and valued. In some cases, assets with future financial benefit may be considered – such as pension entitlements or anticipated inheritance.
Valuing contributions: This includes both financial contributions and non-financial contributions that each party brought into the relationship. Financial contributions include wages, assets, government payments and financial gifts. Non-financial contributions include things like child-rearing, house maintenance and anything else essential to the relationship. As a preliminary step, the value of each party’s contribution determines their respective shares within the property settlement.
Future needs of each party: Once the contributions have been valued, an adjustment may be made depending on future needs. Future needs are determined by a range of factors, including earning capacity, health and parenting arrangements.
The practical effect: Once the above calculations and adjustments have been made, the court will then look at whether the property settlement is both equitable and fair. For example, the court may offer an increased adjustment to single mothers and older women post-divorce, as often times their earning capacity is reduced compared to their ex-partners. However, every property settlement and circumstance is different, so the outcome will differ from case to case.
How a lawyer can help you
No matter your circumstance, engaging a family law and property settlement expert is crucial to a smooth process; whether that’s through helping you identify assets thoroughly, understanding what you may be entitled to, providing mediation services, ensuring agreements legally binding, or representing you in the Family Court.
At Le Brun & Associates, our committed team of Family Law experts are specialists in property settlement. Using a tailored and personalised approach, we are dedicated to supporting you. We understand how timely property settlement can be, so we are committed to offering prompt and efficient advice. Speak to us today at a free 30-minute, no obligation consultation. At Le Brun & Associates, you can rely on us as we always stand by you.