Property Settlement is the legal term for what assets each party is entitled to and what liabilities each party is responsible for. Property can include anything of value including but not limited to bank accounts, superannuation, shares, insurance policies, business interests, cars, furniture and houses and land.
If you are married, or in a de facto relationship and separated after 1 March 2009, your entitlement to property is determined under the Family Law Act. To determine your entitlement to property settlement the court adopts a four step approach:
Determine the net value of the asset pool. This involves making a list of all the assets and liabilities and their value. Some assets may need to be valued by a registered valuer
Determine the parties financial and non-financial contributions as a percentage. This involves working out each parties’ financial contributions considering the assets of each party at the commencement, earnings, gifts, inheritances, payouts or improvements to property or other assets. It also involves looking at the contribution of each party as a homemaker or parent and such contribution may be considered valuable
Determine the parties future needs. This involves looking at what the future needs of each person are likely to be taking into account dependants to support, disparity between earnings and ages of the parties, any health problems and prospects of employment. Your percentage entitlement may be increased or decreased depending on these factors
Consideration as to whether the property settlement is just and equitable. This involves the court making a determination as to whether the orders as to property settlement are just and equitable and the court in its discretion, may increase or decrease your percentage entitlement
If you were in a de facto relationship and separated after 21 December 1999, but before 1 March 2009 your entitlement to property settlement is determined by the Property Law Act. Your percentage entitlement will be determined similar to the way married couples are covered by the Family Law Act, but the main differences are that you are not entitled to spousal maintenance and superannuation is not considered an asset, but a financial resource. However, in some cases you may be able to opt into the Family Law Act if both parties agree. You should seek legal advice.
If you were in a de facto relationship and separated before 21 December 1999, there are no clear rules about how property is to be split. A lot of emphasis is placed on what financial contributions were made to the property.
If you and your spouse agree as to how to divide your property, you can formalise your agreement by either a Binding Financial Agreement or Consent Order. We strongly recommend you seek legal advice to ensure these documents have been prepared correctly as there may be exemptions from paying stamp duty if assets are transferred pursuant to a Binding Financial Agreement or Consent Order.
If there is no agreement, you will need to apply to the court. We strongly recommend you seek legal advice prior to filing proceedings as there are certain pre-action proceedures that must be followed. There may be implications as to legal costs if they are not followed.
If you are married and have obtained a divorce, you have 12 months from the date your divorce became absolute, to commence proceedings for property settlement. If you were in a de facto relationship, you have 2 years from the date of separation, to commence proceedings for property settlement. Outside these time limits you must obtain the leave of the court which may be difficult to obtain and is often only granted in exceptional circumstances. Please seek legal adviceurgently if you are outside this time to obtain advice as to your prospects of proceeding.
Determine the Value of the Asset Pool
Determine the Percentage of Financial & Non-Financial Contributions
Determine Future Needs of the Parties
Consideration as to the Property Settlement being Just and Equitable