Joliman Lawyers are experts in family law and in the division and settlement of property and assets, when relationships change or breakdown.
At the end of a relationship/marriage, it is important to determine how to divide up your assets and financial resources. A property settlement is the term used to describe who gets what after the end of a marriage. The Family Law Act 1975 covers matters relating to property settlements for married couples and de-facto couples (including same-sex relationships).
Property settlements can also cover such things as division of property, spousal maintenance, child support or financial enforcement. “Property” includes any tangible asset, such as your home, other real estate, money in the bank or other financial institution, cars, boats, motorbikes, investments (i.e. shares and managed funds), business interests, household contents, farm machinery, water entitlements, Superannuation, interest in family trusts and even the family pet; this is not an exhaustive list.
How do you determine what the Property Settlement should be?
Contrary to urban myth, there is no presumption that the property should be divided 50/50, 60/40 or in any other arbitrary proportion. The Family Law Act sets out factors which must be taken into account when a Judge/Federal Magistrate has to consider how property is to be divided.
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. Beware of “advice” received from well-meaning friends or family as a result of their own experiences. Each person’s situation is different and should be carefully assessed by a duly qualified family lawyer like the team at Jolman Lawyers, who are experienced in this field to give the right advice.
The factors the Family Law Act specifies must be taken into account are as follows:
- The current value of the property concerned and the extent of any liabilities;
- Direct financial contributions by each party, this includes financial contributions made during and also prior to the commencement of the relationship. Assets and savings owned at the commencement of the relationship are taken into consideration.
- Indirect financial contributions by each party, for example, gifts and inheritances from families/deceased estates, etc.
- Non-financial contributions to the marriage or de facto relationship, i.e. caring for children, being the homemaker and maintaining or improving the property etc.
- Future needs. This includes a consideration of age, health, financial resources, care of children and earning capacity.
- Finally, after considering all of the above, the final consideration is to apply the test of whether any proposed property settlement is fair and equitable in the circumstances.
It is important to realise that the way your assets and debts will be shared between you will depend on the individual circumstances of your family. Your settlement will invariably be different from others you may have heard about because every relationship’s financial circumstances are different and no two can be completely or accurately compared.
Are inheritances and gifts excluded?
Gifts and inheritances are not excluded in family law. However they may be so important that significant “credit” is given to the spouse responsible for bringing in the asset into the marriage.
Can you have an informal property settlement?
Whilst there is no law against making your own informal property settlement without lawyers and outside the scope of the Family Law Act, it is not a wise move. Unless a settlement is approved by a Court, or a formal binding Financial Agreement is made pursuant to the Family Law Act, an informal property settlement is not regarded as binding. This means that one of the parties could renege on it and be entitled to apply to the Court for a greater share of the property in the future. However, it is not necessary for you to appear in court in order to have a binding settlement. If terms of settlement are reached, an experienced family lawyer can prepare an Application for Consent Orders which can be lodged at the Court without the need for anyone to appear in Court. Consent orders have the same legal force as a decision made by a Judge. Before making the consent orders the Court will need to be satisfied that the orders are properly drafted and that the overall settlement is just and equitable. The benefit of having orders made by consent is that you know exactly what the settlement will be as opposed to the uncertainty of having a Judge decide the matter for you.
When should a property settlement be done?
An application to a court can be made at any time after the marriage or defacto relationship has broken down.
Is there a Time Limit?
Yes. If a divorce has been granted, you must make an application within 12 months for a property settlement. If you are outside the 12 month period, you must seek leave of the court to file an application.
Full and Frank Disclosure
If you are involved in a case about property you are required to make “full and frank disclosure” to the other party about all of your property, superannuation and financial resources. That means that you must disclose all relevant information respecting your assets, superannuation, shares and any other monies or financial resource.
Mediation and Negotiation
The Family Law Rules require you to take certain steps before commencing legal proceedings in the Family Court (These steps are called Pre Action Procedures). The Pre Action Procedures are intended to encourage parties to resolve matters through negotiation rather than having your matter determined by the court. Unless your case is urgent, or involves some exceptional factor, such as allegations of abuse or fraud, you must:
- Make a genuine effort to resolve the dispute through counselling or mediation;
- Providing the other party with copies of relevant documents;
- Make a settlement offer;
- Advise the other party of the orders you will seek from the Court.
To make an appointment to discuss the property settlement issues that are unique to your set of circumstances, please give us a call.
The first half hour appointment is free of charge.