What is a property settlement?
A property settlement is an agreement between spouses that provides for the division of their assets between them in the event of a relationship breakdown.
It is important to understand that, under Australian law, there is no presumption that assets must be divided equally between husband and wife. Nor is there any formula used to divide your property.
Instead, the Family Court’s objective is to make orders for a ‘just and equitable’ division of assets. This means that, if the matter goes to court, a decision is made after all the evidence is heard, and the judicial officer decides what is just and equitable based on the unique facts of your case.
What are the various ways you can achieve a property settlement?
You can achieve a property settlement in the following ways:
1. You and your former spouse or partner can agree on how your property should be divided without any court involvement.
2. You can seek to formalise your agreement by applying in the Family Court for consent orders.
3. If you cannot reach an agreement, you can apply to the court for financial orders, including orders relating to the division of property and payment of maintenance.
What assets are included in a property settlement?
The assets that are included in a property settlement include:
- real estate
Is it possible to reach a property settlement agreement outside of court?
Yes, it is possible to reach a property settlement outside of court. In fact, it is often desirable because this can save both time and energy. Most importantly, it can reduce your legal costs.
This can be done in two ways:
1. entering into a binding financial agreement
2. obtaining consent orders.
What is a financial agreement?
Binding financial agreements are written agreements that are recognised under the Family Court Act 1975 (Cth).
A financial agreement can cover a range of financial issues, including the:
- division of property
- division of superannuation
- maintenance of either spouse.
It is a legal requirement that both parties received independent legal advice before signing an agreement.
What are consent orders?
Like a financial agreement, consent orders are written agreements that can cover a range of financial issues, including the:
- division of property
- division of superannuation
- maintenance of either spouse.
Consent orders will be formalised by the Family Court of Australia if the court is satisfied that the terms of the agreement are ‘just and equitable’.
What happens if you cannot reach an agreement regarding your property settlement?
If you have separated and cannot reach an agreement regarding property, you will need to lodge an application for property orders in the Family Court of Australia or the Federal Magistrates Court.
The outcome will be decided through a court hearing.
These orders must be made within 12 months of the divorce or end of a de facto relationship.
What does the court consider when assessing a property settlement?
When deciding how property should be divided, the Family Court considers four key questions:
1. What is the ‘net asset pool’ of both former partners?
A net asset pool includes the value of all of the property owned by the former partners, and includes property obtained before or during the marriage or de facto relationship or after separation.
2. What are the financial contributions from both former partners? What are the non-financial contributions have been made by each partner?
3. What are the ‘future needs’ of both former partners?
In examining what the future needs of both former partners are likely to be, the court looks at issues such as: age, future parenting responsibilities, income, financial stability and new relationships.
4. Is the proposed property settlement ‘just and equitable’ to both former partners?
How does Monardo Solicitors approach property settlements?
At Monardo Solicitors, we understand that reaching a ‘just and equitable’ property settlement can be a difficult and stressful experience. In addition, the process can be complex, especially if superannuation is involved. For that reason, it can help to have an experienced lawyer guide you through the process, especially if you need to go to court.
How does our property settlement form work?
If your property settlement issue is relatively straight forward, you may wish to use our online property settlement form. Using the form will help minimise the costs of reaching a formal agreement regarding property settlement issues with your spouse.
Step One: You fill in our online property settlement form
You simply fill in our online property settlement form providing us with the background information about your case and send it to us via the reply button at the bottom of the page.
Step Two: We get in touch with you quickly, to discuss your case.
Can we help you if you don’t like filling in online forms or the situation regarding your property settlement issue is a little more complicated than is usually the case?
Of course we can assist. If you don’t like filling in online forms or your property settlement is complicated, just give us a call on 02 8006 5244 to make an appointment to discuss your property settlement. Our experienced family law team will be happy to assist.
Property Settlement FAQs
How is superannuation considered a property settlement?
Superannuation is taken into consideration in the context of the overall property settlement and is assessed in the same way as other forms of property.
Superannuation is considered irrespective of whether it was acquired before or during the marriage or de facto relationship or after divorce or separation.
Superannuation is not subject to an automatic 50/50 division.
The court will make its final decision in relation to superannuation on the basis that the settlement is ‘just and equitable’.
When dividing superannuation, there are two main issues that are considered:
- how the superannuation interests should be valued
- how superannuation payments should be split.
What should you do if you are separating and don’t know much about your financial situation because you left the management of your finances to your spouse? Can you still get a property settlement?
It is reasonably common for one person in a relationship to be primarily responsible for the couple’s finances. When you are separating, this can become a problem for the other person because a lawyer will need to know what they own in order to advise them on the property settlement.
If you are in this situation, you should get legal advice as soon as possible. Ideally, this should be when you are considering separating, but prior to it occurring. This means that a lawyer can guide you as to what questions you should ask your spouse while you are still together. It will also enable you to look out for the relevant documents and take copies.
It is important to note that although getting advice later is not ideal, it is far from a disaster. Family law in Australia places an obligation on each party to make full and drank disclosure of their financial circumstances to the other party.
Can the Family Court make decisions about property settlements in the case of de facto relationships?
The Family Law Courts can now make orders in relation to financial matters following the breakdown of eligible de facto relationships. Previously, these courts could generally only make orders in cases where parties were married (except in the ACT and the NT). Instead, financial disputes between former de facto partners were generally dealt with by state and territory courts, using the law applicable in that state or territory.
The Family Law Courts can now order a division of any property that the couple own, either separately or together.
Superannuation that each partner has can be split.
The Family Law Courts can also make orders in relation to spouse maintenance.
In order to make such orders, the Family Law Courts must be satisfied of one of the following:
- the period (or the total of the period) of the de facto relationship is at least two years
- there is a child of the de facto relationship
- one of the partners made substantial financial or non-financial contributions to their property, or as a homemaker or parent, and serious injustice to that partner would result if the order were not made, or
- the de facto relationship has been registered in a state or territory with laws for the registration of relationships.
How do the Family Law Courts define de facto relationships?
A de facto relationship is a relationship that two people who are not married or related by family have as a couple living together on a ‘genuine domestic basis’.
It can exist between two people of the opposite sex, or between two people of the same sex.
All the circumstances of the relationship will determine whether a couple have a de facto relationship. These include:
- the duration of their relationship
- the nature and extent of their common residence
- whether a sexual relationship exists
- the degree of financial dependence or interdependence, and any arrangements for financial support, between them
- the ownership, use and acquisition of their property
- their degree of mutual commitment to a shared life
- whether the relationship has been registered, in a state or territory with laws for the registration of relationships
- the care and support of children, and
- the reputation and public aspects of their relationship.