A property settlement is a process where the assets and liabilities of a relationship are identified and the property divided between you and your partner once your relationship has broken down.
If you are in a de facto relationship you can make an application for a property settlement under the Family Law Act 1975 so long as you have been in a relationship for at least two years where you have lived together in a genuine domestic relationship with your partner, or you have had a child with your de facto partner, or you have made substantial contributions to the property and/or finances of your relationship. Whether your relationship is a de facto relationship under the Family Law Act is a significant and often complex matter and if you are unsure you should contact us to discuss your options.
You do not have to be divorced to start the process to divide your assets, all that is required is that you have separated from your partner. There are however limitations to the time in which you have to make a court application in the event you cannot agree to how your property should be divided. If you are married, you need to commence Court proceedings within 12 months of the date in which you receive a decree of divorce. If you are in a de facto relationship you will need to commence proceedings within 24 months from the date in which you separate.
There is no requirement for you to go to Court to formalise your property settlement, in fact the vast majority of matters are resolved by negotiation, mediation and agreement without the need for Court proceedings. An agreement reached can be drafted into a binding financial agreement, or into a consent Order which is filed with the Court. It is critical that property matters are finalised by way of binding agreement or Court Order to ensure that a former partner cannot come back at a later stage and make a claim against you for a property settlement.
Each case must be determined on the specific circumstances and facts of that case. While there may be many cases that have similar circumstances no two cases are ever exactly the same. It is important to obtain legal advice from a lawyer who has experiences and expertise in family law property settlement matters and who has a solid knowledge and understanding on caselaw so as to be able to advise you about what your entitlement may be in a property settlement.
How much of my property will I get?
The Family Law Act sets out how property is divided when a de facto relationship or a marriage breaks down. The process is often complicated but in essence it involves the identification and value of the property of the relationship, determines what “percentage division” should occur between the couple and then must ensure that the division of property be just and equitable. To determine what is a just and equitable division the Court uses a four step process:
- Step 1 ascertaining the net property pool – Generally all property that the parties have at the time that the property is divided will form part of the property pool, this includes property acquired before during or after the relationship. Property includes assets of both parties such as real property, shares, vehicles, jewellery, savings, furniture and effects. To determine the net property pool the liabilities are deducted from the assets. Superannuation does generally comprise part of the pool however the way in which superannuation interests can be calculated and the time and amount of any superannuation split may be treated differently to the division of other property of the relationship. The Court will also consider the financial resources of each party, this includes assets or funds which are not in the direct control of a party, however they have some interest, influence, or indirect control of. Considerations must also be given to any taxation matters including liability’s, capital gains, stamp duties, or pending assessments.
- Step 2 assessing the contributions made by each party – Contributions include the initial contributions made by each party namely what you brought into the relationship with you, contributions that you made during the relationship which includes direct contributions such as wages maintenance of assets and real property, indirect contributions such as gifts, or inheritances, and non-financial contributions such as raising and caring for children, housework and home keeping duties and duties as a caregiver to the other party.
- Step 3 assessing each parties future needs – This step looks at the needs of the parties into the future. While it can include any relevant consideration, when assessing future needs the Court will consider things such as the support of a child, the age of the parties, their health, their capacity to earn an income or reskill, the property that they are likely to receive, and the financial circumstances of any new relationship commenced.
- Step 4 the practical effect of the proposed settlement – This step requires the Court to consider what is the practical effect of the proposed distribution of the property and whether this will receive a result that is just and equitable.
Each matter is different and depending on the size of the property pool an adjustment of a few percent can make a large difference in what you will receive. It is essential that the proper investigations and valuations are undertaken to ensure that you know what you may be entitled to in a property settlement. Our expertise in complex property litigation ensures that we can help you navigate the process and ensure that you obtain the best possible results.