What is a property settlement?
A property settlement is a final resolution of the ownership of property held by parties as a consequence of their marriage or relationship breakdown. It enables each party to divide up their assets and then retain the assets they receive as their own property absolutely, moving forward in their lives.
The following are some of the important facts to keep in mind in relation to family law property settlements:
- The law relating to property settlement for married couples is contained in the Family Law Act.Family Law disputes a primarily dealt with in the Family Court and the Federal Circuit of Australia.
- Except in Western Australia, de facto couples (including same sex de facto couples) also have the same rights and entitlements and the same laws apply to this class of people in relation to property settlement after the breakdown of their relationship.
- It is recommended that you try to resolve your property settlement sooner rather than later after separation.This is because the law takes into account assets at the current date (whatever that date may be) rather than simply dividing assets that existed at separation.
- If you are married and then separate you can apply for a divorce after 12 months of living separately and apart.
- If you are divorced, it’s important to remember that you only have 12 months (from the date of your divorce) to file proceedings for property settlement and spousal maintenance in Court.
- If you are in a de facto relationship you only have 2 years from the date of your separation to file proceedings in Court for property settlement.The only way to make a property settlement binding and enforceable is by way of Consent Orders which are lodged and approved in Court or alternatively, entering into a Binding Financial Agreement.The final alternative is to litigate your matter in Court and have the Court make an Order.
- If you have a Binding Financial Agreement that was put in place before your relationship commenced or before you separated, then if that Agreement is properly drafted and binding then it may, in itself, set out the terms of settlement for property matters in the event of any separation and exclude the Family Court from making any Orders.
Some common myths and misunderstandings about property settlement
- All assets, liabilities and financial resources must be identified and valued at the current date. There is no “cut off” point for valuing assets at the date of separation.
- There is no law that excludes assets brought into the relationship by either party.
- There is no law that excludes inheritances or gifts received by a party during a relationship.
- There is no law that excludes assets acquired after separation by the party and prior to a property settlement being finalised.
- There is no set mathematical formula that is the same for every separating couple. For example, the Wife does not always get 70% because there are two young children of the marriage. Each case is different and decided on its individual facts and circumstances.
- Superannuation is treated as if it was property and is identified and valued. Superannuation can be split across to the other parties own superannuation fund as part of the final property settlement order.
- In most cases, assets held in a family trust are treated as if they are assets of the marriage and are identified and valued as part of the property settlement exercise. There is no law that allows a party to hide assets in a Trust so as to escape division of such assets with their spouse or partner.
- All assets that a party has, wherever they are situated in the world, must be identified, disclosed and valued. There is no law that says a parties’ interest in an overseas asset is excluded from the identification and valuation stage of a property settlement.
- It does not matter who is responsible for the breakdown of the marriage in working out a fair property settlement.
- It does not matter who left the marriage and what their reasons for leaving the marriage were in working out a far property settlement.
- Moral considerations as to a parties’ conduct during the marriage have no relevance to working out a fair and equitable property settlement under the law.
Conduct of the parties, in most circumstances (other than domestic violence and negligent waste) is also not relevant to working out a just and equitable property settlement.