Table of Contents
This article answers the question, ‘What am I entitled to in a separation?’
To do that, we’ll cover the following:
- What a property settlement is (and whether you’ll require one);
- Whether there will be a 50/50 split;
- How past and future contributions factor into entitlements;
- Long term considerations to be aware of now; and
- Key timeline constraints to be aware of.
The process of separation is largely similar whether you are separating from a marriage or a de facto relationship, so the answers to many questions will be the same regardless of which type of relationship you are separating from.
Unsure If Your Relationship Is Classified As De Facto?
While the beginning of a marriage is usually fairly clear cut, the beginning of a de facto relationship can be less clear. Under Australian law, a de facto relationship is one where a couple (of any gender) are living under the same roof for a minimum of two years on a genuine domestic basis.
To determine if there is a ‘genuine domestic basis’, the Court may consider the following factors:
- Whether there was intermingling of finances;
- Any co-contribution to property;
- Whether there are any children from the relationship;
- If friends and family consider you to be in a relationship;
- If there is/was a sexual aspect to the relationship.
If you are still unsure about whether you are separating from a de facto relationship or not, getting advice from a lawyer early can help to clarify the next steps to be taken in your separation and what you might be entitled to. Seeking information from a lawyer does not equate to a commitment to any legal process, it can simply be information gathering to empower you with what you want to do next.
Property Settlements & When They Are Required
A property settlement is the financial separation and the division of assets that takes place when a couple, married or in a de facto relationship, separates. It is common for people to falsely believe that a divorce includes the division of assets and the preparation of parenting plans. This is not the case.
A property settlement is its own stand-alone process, and in fact, you can begin to take the first steps towards a property settlement as soon as your marriage or de facto relationship ends. If you are asking the question, ‘What am I entitled to in a separation?’, understanding the property settlement process is the first step.
One of the first steps in a property settlement is to make sense of what is known as the asset pool. This means all the assets in the relationship, including property, cars, money, shares, and even business assets, must be included. The liabilities, such as mortgages, personal loans, credit cards and all other debts, are then subtracted, and the final asset pool can be determined.
While you do not have to take the first step in resolving your property settlement, it is recommended that you do and that you begin the process as early as possible. This is because the property pool is calculated at the time of the property settlement, not at the time of separation. After separation, if assets decrease in value, or if one person gets a large sum of money through something like an inheritance, a bonus at work or a lottery win, then these assets or losses will be included in the asset pool and will form part of the property settlement that hasn’t already been finalised.
Property settlements do not need to happen through the Courts. However, it is always a good idea to get legal advice early on so that you are informed about any potential financial decisions that need to be made and how that could impact you in your property settlement. Before making any large financial decisions, including the buying or selling of property or transferring of cash, bitcoin etc., seek legal advice to ensure you do not take actions that may put you at a disadvantage when it comes to a property settlement. It is also recommended that you obtain financial advice to understand the financial implications of any property settlement you agree to.
Are There Time Limits?
One of the major differences between separation from a marriage and separation from a de facto relationship is the timeline in which the property settlement needs to have been finalised.
The End Of A Marriage
You may begin the Property Settlement process from the day of separation. If you don’t complete the settlement process early, once you are formally divorced, that is, when the Court has made a Divorce Order, you will have 12 months to complete your property settlement.
De Facto Separations
Just like for separated married couples, the property settlement process can begin from the day of separation for a de facto relationship. From that date, there is a 2-year time limit from the date of separation in which you must apply to the Court for the property settlement.
Will There Be A 50/50 Split?
There is no legal assumption in Australia that your combined assets will be divided equally. There are many considerations that are factored into a decision by a Court in determining the nature and percentage split of the asset pool.
Some factors that are considered include:
- The assets that were brought into the relationship (though the significance of these decreases with the length of the relationship);
- Each person’s financial contributions during the relationship;
- Other contributions to the relationship, including child raising and home keeping;
- The future earning potential of each person including any difference in income;
- Each person’s age, health (including any disability), child raising and/or caring responsibilities, time away from career etc.
Getting legal advice early is always the best way to get the most positive outcome. The relevant factors are different in every relationship, so each property split will be unique. Answering the question ‘What am I entitled to in a separation?’ requires an understanding of where you stand in relation to your particular asset pool and your individual circumstances. This is best achieved by obtaining expert legal advice.
How Past And Future Contributions Factor Into Entitlements
Of the considerations listed above, two that people often want to know more about are:
- How past contributions to a relationship will impact what they are entitled to; and
- What future lifestyle and income factors are considered.
This can be of particular concern if:
- You are separating from a relationship where you either were the primary breadwinner and have a significantly higher future earning capacity;
- If you are leaving a relationship where you earned significantly less;
- If your contributions to the relationship were not traditionally financial, for example, being a stay-at-home parent over a number of years;
- If you have a significantly lower future earning potential, due to health, child raising demands or time away from your career.
It is common to be anxious about what will happen to your finances, whether you will be able to maintain your current lifestyle and if you can actually afford to separate.
Family Law in Australia takes all of these factors into consideration and will look at how much money or how much of the assets would be fair for each person to receive, based on all contributions and the future needs of each person.
Conversations around money can be stressful and sometimes even scary. Getting legal advice early can help you gain a better understanding of your own particular situation and what options and rights you have. Having a clearer understanding of what might be the outcome of a property settlement and what your financial situation might look like can give you the confidence you need to make the best decisions for yourself and your family moving forward.
What Are The Long Term Considerations To Be Aware Of Now?
While the property settlement process can start from the time of separation, the best first step is to get informed. There can be a significant difference in how each person is coping and responding to a separation. Some people may want to take steps to move on as quickly as possible. This may be the case where that person may already be in a new relationship or where there is stress around new parenting arrangements and there is a belief that resolving the property settlement may also resolve the parenting agreement. Others may be at a different stage in the grieving process and might not be ready to have these discussions.
People can make decisions that later on put them at an unintended disadvantage in the eyes of the law.
Examples of this can include:
- Moving out of the family home (in some circumstances);
- Cutting off payments or paying bills for a financially dependent partner;
- Selling or buying property after separation and before the property settlement;
- Transferring money into a new partner’s name.
While you may have the best of intentions or be acting out of anger or hurt, knowing how your actions now may impact you later is the best course of action. An experienced family lawyer can provide information about your specific circumstance and how to best protect your assets through separation.
Understand What You Are Entitled To In Your Separation
Every relationship is different, and so without knowing the particulars of your asset pool and your relationship, it is not possible for a person to make a realistic prediction about what your property settlement outcome will be, to help you answer the question of ‘What am I entitled to in a separation?’
Getting advice from a family lawyer early is the best way to empower you with the information you need to understand your unique situation. Getting legal advice early on in the process is like seeing your GP before that nagging ache becomes so severe that you are bedridden. Knowledge will give you clarity about what you may be entitled to.
Have you recently separated or are you considering separation?
Do you have concerns or questions about what you are entitled to after separating from your former partner?
We can help you wherever you are based in Sydney. We have three office locations – Penrith, Norwest & Sydney CBD – as well as phone and online consultations if preferred. Reach out to our team on 02 47 222 050.
Disclaimer: The content in this article provides general information however it does not substitute legal advice or opinion. Information is best used in conjunction with legal advice from an experienced member of our team.