Family Law and Property Settlement
Posted in: Property Settlement Tuesday, 21 August 2018Whether you have been married or living as a de facto couple and regardless of the duration of your relationship, separation is a painful and disruptive time.
Negotiating and finalising property settlement arrangements can be complex and emotionally draining. While the majority of couples resolve things satisfactory and move on with their lives, it does take time.
It is important to get appropriate financial and legal advice as soon as difficulties arise in the relationship, even if you don’t ultimately separate. Obtaining legal and financial information regarding property settlement issues will empower you to make better decisions for your future.
Even if you and your former partner are not in dispute regarding property settlement or other issues, the same lawyer cannot act for both of you. To avoid a conflict of interest each of you should engage a separate lawyer. The same applies to financial advice.
It is important that you each consult experienced property settlement lawyers to ensure that you achieve a resolution quickly with minimal emotional and financial fall out.
Your property settlement solicitor at CLO Lawyers will provide you with valuable assistance in determining how the family law property settlement process applies in your particular circumstances. You will also be advised about family dispute resolution options and the best method of achieving finality once agreement is reached.
How is a property settlement determined under Family Law in Australia?
The Family Law Act 1975 sets out the general principles the court considers when deciding financial disputes after the breakdown of a marriage or a de facto relationship.
The general principles are the same, regardless of whether the parties were in a marriage or a de facto relationship. If a Court was required to determine your property settlement, the judicial officer assigned to your matter would decide what is just and equitable based on the unique facts of your case. Your property settlement would probably be different from others you may have heard about. There is no formula used to divide your property.
However, there are general principles outlined in the Family Law Act for property settlement determination:
• working out what you've got and what you owe, that is your assets and debts and what they are worth
• looking at the direct financial contributions by each party to the marriage or de facto relationship such as wage and salary earnings
• looking at indirect financial contributions by each party such as gifts and inheritances from families
• looking at the non-financial contributions to the marriage or de facto relationship such as caring for children and homemaking, and
• future requirements – a court will take into account things like age, health, financial resources, care of children and ability to earn.
How will my property settlement lawyer determine an appropriate property settlement outcome in my case?
Your property settlement solicitor at CLO Lawyers will apply to your particular circumstances, the following “4-step” process prescribed by the Family Law Act.
Step 1 – Identifying and valuing the assets, liabilities and financial resources of the parties
This first step involves identifying and valuing all assets, liabilities and financial resources, whenever and however acquired. In many cases this is a simple part of the process. However, in some cases, particularly those involving businesses, the valuation exercise can be quite complex and requires the involvement of specialist experts.
What is often not understood, is that property held by you in your own name prior to entering into the relationship, or property you have acquired since separation, may be included in a property settlement determination.
Step 2 – Assessment of the contributions made by the parties
The second step involves the assessment of the contributions made by the parties during their relationship. These include:
• direct and indirect financial contributions to the property of the parties;
• direct and indirect non-financial contributions to the property of the parties; and
• contributions to the welfare of the family including contributions in the capacity of homemaker or parent.
Under what circumstances might it be considered that the contributions of the parties were other than equal?
In many property settlement cases, particularly where there has been a long relationship, it would be considered that the parties have contributed equally.
However, a conclusion might be drawn that contributions of the parties were other than equal, particularly in the following instances:
• where the relationship is short and there are no children, in which case the Court will be principally concerned about the direct financial contributions made by each of the parties;
• where one of the parties has entered the relationship with considerably more assets than the other party; and,
• where one of the parties has made a substantial contribution by way of an inheritance, gift from family or personal injury settlement; or
• where the deliberate or reckless conduct of one of the parties has resulted in a loss to the parties.
Step 3 – Assessing the future needs of each of the parties
In assessing the future needs of each of the parties, consideration must be given to such things as:
• the age and state of health of each of the parties;
• the income, property and financial resources of each of the parties and their capacity for employment;
• who has the care of any child of the relationship under the age of 18 years;
• commitments necessary to enable a party to support himself or herself or any other person that the party has a duty to maintain;
• the eligibility of either party for a pension superannuation;
• the standard of living that is reasonable in the circumstances;
• the extent to which the earning capacity of a party has been affected by the relationship; and,
• if either party is living with somebody else, the financial circumstances of their household.
These factors will determine whether there ought to be an adjustment in favour of one or other of the parties to compensate for any difference in their future circumstances.
Step 4 – Is the proposed division of property fair to both parties?
After applying steps 1- 3, consideration must be given as to whether the proposed division of assets is fair to each of the parties. This assessment is done by holistically examining the circumstances of each case.
Time limits for applications for property settlement or property adjustment
If you were married, applications for property adjustment must be made within 12 months of your divorce becoming final.
If you were in a de facto relationship, your applications for property adjustment must be made within 2 years of the breakdown of your de facto relationship.
If you do not apply within these time limits, you will need special permission of a court. This is not always granted.
Your property settlement agreement
Reaching a property settlement agreement with the other party offers many advantages, such as:
• you make your own decisions
• you greatly reduce the financial and emotional costs of legal proceedings
• your continuing relationship as parents, if you have children, is likely to work better
• you are able to move forward and make a new life for yourself, and
• you may improve communication with your former partner and be better able to resolve disputes in the future.
How do you negotiate a property settlement agreement?
A property agreement is best negotiated using family dispute resolution with advice from your property settlement lawyer or financial planners as required.
How do you formalise your property settlement agreement?
You can agree on how your property should be divided without any court action. You do this through either:
• a financial agreement, or
• an agreement formalised by applying for consent orders in which you ask a court to make orders in the terms of your property settlement agreement. Your property settlement solicitor at CLO Lawyers will provide you with advice regarding:
• Entering into a Financial Agreement
• Setting aside a Financial Agreement
• Entering into Consent Orders
• Options available when you cannot reach agreement with your former partner regarding property settlement and financial arrangements.
Useful links to information regarding divorce in Australia
Family Court Website: FamilyCourt.Gov.au
Family Relationships Online – An Australian Government Initiative FamilyRelationships.Gov.au
Contact your property settlement law firm – CLO Lawyers
Contact your property settlement lawyers Murray Crawford and Sarah Marsden today on 07 4631 9000
About the Author
Director | BEc, LLB, LLM (Applied Family Law)
With a passion for the law and a strong social conscience, Murray is a strong advocate who’s focused on achieving positive outcomes for his clients and supports the community through leadership positions with several not-for- profit organisations.
For more information about him, see details here.