Property Settlement Basics

PROPERTY SETTLEMENT BASICS

There are a lot of common misunderstandings regarding property settlements, so here are some practical basics:

Divorce and Property Settlement

Married couples do not have to be divorced to formalise a property settlement agreement.  Whether or not a couple is divorced has no effect on a property settlement other than dictating whether there is a time limit running for the parties to apply to the Court for an order regarding property settlement and/or spousal maintenance orders.

Time Limits and Property Settlements

For married couples, either party can apply to the Court for property settlement and/or spousal maintenance orders any time up until 12 months after a Divorce Order has become absolute.  The Divorce Order becomes absolute four weeks after the hearing date when the Divorce Order is granted.

For de facto couples, either party can apply to the Court for property settlement and/or spousal maintenance orders any time up until 2 years after the parties have separated.

Formal Agreements

Financial

Parties can formalise their property settlement agreement by way of a written agreement called a Binding Financial Agreement or by Consent Orders.  Consent Orders are orders that are submitted or filed with the Court by the parties and the Court then considers the proposed orders and stamps them if satisfied that the orders provide for a property settlement that is fair and equitable according to the principles of the Family Law Act 1975 (Cth). 

Children

Parties are also able to formalise their agreement regarding care of children of the marriage by way of consent orders filed with an Application for Consent Orders with the Family or Federal Circuit Court of Australia.

Applications to the Court

If parties cannot reach agreement regarding property settlement and/or children’s issues then either can make application to the Federal Circuit Court of Australia or the Family Court of Australia for interim and final orders in relation to same.

Parties normally are required to complete the Pre-Action Procedures before an application can be made to Court for orders. This applies regardless of wether it is a property settlement or agreement regarding children or both.  The Pre-Action Procedures involve:

  • writing to the other party with an offer to discuss and hopefully resolve the property settlement and/or children’s issues and giving the other party at least fourteen days to respond; and
  • obtaining a certificate from either a court-approved mediator to state that at least one of the parties has  attempted to mediate the dispute; or
  •  obtaining a certificate from the Registrar of the Court waiving the necessity for the parties to attend a mediation. This waiver may be given if a party can supply evidence that it is not appropriate for a mediation to be held for some valid reason, for example that there has been violence between the parties or one party cannot be located.

Exception to Pre-Action Procedures

If there is an urgent need for orders to be made (for example because a party is about to sell property that forms part of the joint property pool without the consent of the other party) then the pre-action procedures may not have to be complied with.

Full Financial Disclosure

Both parties are required by the Family Law Rules to make full financial disclosure of their assets, liabilities, income and expenses.

If you do not obtain this full financial disclosure then it will not be possible to assess whether the property settlement agreement represents a fair and equitable settlement for you because the value of the matrimonial asset pool has not been proven and therefore it is impossible to know whether the portion of the joint asset pool that you are retaining is within a range that a Court might award you.

Other possible consequences of not obtaining full financial disclosure include:

  • You may not be aware of all assets and liabilities that actually are included in the property pool;
  • There may be liabilities you are responsible for that you were unaware of; and
  • The formalised agreement may not deal with responsibility for all assets and liabilities, so for example it may be discovered at a later point that a party is still liable pursuant to a personal guarantee for a loan regarding property or a business that belonged or now belongs solely to the other party.

Best Course of Action

If you are separated or are considering you might separate from your partner then it is strongly recommended that you obtain legal advice regarding:

  • your options;
  • steps that can be taken to protect your interests; and
  • strategies to facilitate reaching a fair and equitable agreement.

Getting advice early will assist you to take necessary steps quickly, and this will generally assist to get realistic negotiations happening and to reach a resolution regarding a property settlement agreement.

If you would like further information and/or assistance then please contact our experienced solicitor Alicia Schubert for an appointment on 3711 2709.

 

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