SCB LEGAL
A property settlement involves the process of identifying your combined financial position with the goal of coming to an agreement about how any assets or debts should be shared, now that you are separated.
A property settlement can commence from the date you and your former spouse or partner separated. You do not need to wait for a divorce to be granted before starting the property settlement process.
How you tackle your property issues depends on whether you both agree to how the property should be divided. If you both agree to the property arrangements, it greatly reduces your financial and legal costs. In addition, it facilitates a civil and amicable outcome, which is especially advantageous when children are involved.
You can formalise your property agreement without having to go to Court.
There are important time limits that apply to finalising a property settlement. If married, you must apply to the Court for Orders within 12 months from the date of your divorce. If you were in a de facto relationship, your application must be made to the Court within 2 years from the date of the relationship ending. This is also the case for matters going to Court, not just Consent Orders.
In the event you do not finalise your property settlement within these time limits, you will need to apply for special permission from the Court, which is not always granted.
There are a number of risks in waiting too long to finalise your property settlement. One of which is that the asset pool may have reduced since the date of separation and therefore, there is less to divide. Conversely, the value may have increased (e.g. superannuation or a property may have been purchased and appreciated in value). To avoid the need for having to re-evaluate the asset pool, it is best to get this process started, along with any parenting arrangements, very early on.
There is a process that must be followed before determining how assets and liabilities will be divided. The ‘net asset pool’ is the value of the combined assets after all liabilities have been subtracted.
The process is as follows:
The financial disclosure process is the duty for both parties to provide full and frank disclosure of all assets and liabilities. There is a requirement to provide:
Whilst many people believe that the breadwinner made more significant contributions than the person who stayed home and cared for the children, this belief is incorrect. The financial and non-financial contributions of the breadwinner and full-time carer of the children are considered to be equal.
There are significant consequences if it is found that assets or income have been hidden as part of this process.
Once the ‘net asset pool’ is confirmed, then the contributions of both people are considered, taking into account what they brought into the relationship and their contributions during the relationship. These include:
Whilst many people believe that the breadwinner made more significant contributions than the person who stayed home and cared for the children, this belief is incorrect. The financial and non-financial contributions of the breadwinner and full-time carer of the children are considered to be equal.
Sometimes, contributions made post-separation will also be taken into account.
Before dividing the asset pool, the law takes into consideration the future needs of both parties and their children.
Future needs adjustments are to accommodate the future needs of the separated parties. For example, if one person in the relationship took on the role of staying home, raising the children, and doing the housework while the other person engaged in employment to financially provide for the family, and this resulted in one person not being able to obtain employment or impacting on the amount of money they earn, then there needs to be an adjustment made in favour of the person earning less money to take into account the difference in earning capacity.
This can also take into account that one party has paused their career while the other has continued to advance their career and earning capacity. Where one party is considered to be in a weaker position financially as a result of situations like this one, a ‘future needs adjustment’ is to be negotiated between parties, or made by the Court.
These adjustments also take into consideration other factors such as each party’s age, responsibilities for the care of dependent children or other carer responsibilities, financial resources and property, health, and each party’s employment opportunities, amongst other considerations.
Once all of the above is taken into account, there is a requirement by law for any property settlement to be ‘just and equitable’. Meaning, based on the circumstances and all information provided being true and correct, the arrangement is fair to both parties.
Your family lawyer will provide you with advice to ensure that you follow the financial disclosure process properly and alert you to circumstances where you may be disadvantaged in the short or long-term. That is why, even if you can reach an agreement with your former partner, it is wise to seek legal advice early.
In the event you cannot come to an agreement about the division of your property, read on below to learn about your next steps.
SEPARATION & DIVORCE LAWYERS PENRITH, BLACKTOWN & GREATER SYDNEY
Our team can document your agreement and apply for Consent Orders for you.
If you and your former partner are unable to agree about what is fair in terms of dividing your assets, then you must seek advice from a family lawyer. We can then communicate with your former spouse or partner about what a Court would be likely to decide to encourage them to see reason to negotiate and come to an agreement without the cost, stress and delay of having to go to Court.
If this process does not help you both come to an agreement about who will get what, the next step is mediation. Although it is not mandatory to engage in mediation prior to going to Court for property matters, it is a requirement that you make a ‘genuine attempt’ to resolve your matter before commencing Court proceedings. This is why we recommend mediation prior to starting any Court action. You can learn more about mediation and the other avenues we can use to help you come to an agreement, on our Resolution Pathways page here.
If you and your former spouse or partner cannot come to an agreement, then your dispute will go to Court, where a decision will be made for you both. It can take many years for property matters to be finalised by the Court, so by bringing a lawyer in to negotiate on your behalf early, you can avoid the unnecessary and drawn out process that can sometimes occur when people think they are doing the right thing by not bringing lawyers in.
The other advantage to seeking advice from a family lawyer early on is so that you can be alert to what the law says should happen in a property settlement based on your circumstances.
In family law, spousal maintenance or de facto maintenance is financial support that can be payable upon separation by one person to their former spouse or partner, because they do not have the ability to financially support themselves in the short or long-term. This is not automatic and for it to occur, if it cannot be agreed between you, the Court needs to receive an application, and take into account the other person’s capacity to pay it.
Meeting with a family lawyer to seek advice about what your entitlements are, is always a wise first step. You and your former spouse or partner may be able to come to an agreement early on that you can be confident about, when you have information that is accurate about how property settlements and family law works.
When you pick up the phone to arrange a time to speak to us about your property settlement, this does not mean you are ‘lawyering up’. It means you are looking to become informed about the important decisions you have ahead of you. You may not need the support or additional services of a family lawyer after the very first meeting. One meeting may be the only meeting you need.
DIVORCE LAWYERS PENRITH, BLACKTOWN & GREATER SYDNEY
Whatever stage of the process you are at, we can provide advice unique to your situation.
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