Property Settlement Fact Sheet

Marriage

Property settlement for married couples is covered by the Family Law Act.

It is a good idea to try and reach a property settlement by negotiation or mediation.

If a settlement is reached it should be formalised. That can be done by Consent Orders made by the Family Court or by a financial agreement. This provides finality. It also provides exemption from stamp duty for assets transferred pursuant to the agreement.

In fact, people can enter into financial agreements before they are married or during their marriage (while they are happily together). Such agreements can provide for what happens regarding division of property should they separate.

If agreement can’t be reached then the matter will go to court, either the Family Court or Federal Magistrates Court.

You need to commence court proceedings within 12 months from divorce becoming final (if you are late you have to get permission from the Court to commence your case).

The law sets out four steps in determining an appropriate division of property. Those steps are:

1. Valuing the property. This includes superannuation.
2. Making an assessment of the contributions made by each party. This includes financial and non-financial contributions. Examples of financial contributions are: money earned during the relationship, inheriting an asset. Examples of non-financial contributions are: homemaking duties and looking after children.
3. Looking at the future needs of each party and the resources of each party. For example, if one person has the major responsibility for caring for the children, then they will receive an adjustment in their favour.
4. The outcome must be “just and equitable”.

The law allows the “splitting” of superannuation interests.

In some cases, one spouse may be entitled to spousal maintenance. To be eligible for spousal maintenance you need to show:

1. That you are unable to adequately support yourself e.g. because of caring for children under 18 years of age;
2. That your spouse is reasonably able to pay maintenance.

You must apply for spousal maintenance within 12 months of your divorce becoming final (if you are late you have to get permission from the Court to commence your case).

De Facto Relationships

For people in de facto relationships the date of separation is very important.

If you separated on or after 1 March 2009 then the Family Law Act applies. Your case will be heard in the Family Court or the Federal Magistrates Court. The property settlement principles are the same as those outlined above for married people i.e.:

1. Value the property;
2. Assess the contributions;
3. Look at future needs and resources;
4. Ensure that the outcome is just and equitable.

In these cases superannuation can be split.

If de facto couples separated prior to 1 March 2009 then the Property (Relationships) Act applies rather than the Family Law Act (unless both parties consent to the Family Law Act applying). Your case will be heard in one of the Local Court, District or Supreme Court. The main differences to the principles outlined above are:

1. The court mainly looks at steps 1, 2 and 4. Little consideration is given to step 3. If one person has primary responsibility for caring for three young children, then if they come under the Family Law Act they will receive an adjustment in the property settlement. If they come under the Property (Relationships) Act then they won’t receive such an adjustment.

2. Under the Property (Relationships) Act superannuation is not treated as property and it cannot be split. It is, however, still taken into account in dividing up the other property.

Whichever Act is relevant, a court will normally only make a property settlement order if the de facto relationship has lasted for two years or more. There are exceptions e.g. if there is a child of the relationship. Also, regardless of which Act is relevant, court proceedings need to be commenced within two years of the date of separation. Outside of this period special leave needs to be obtained from the court to proceed with the case.

If an agreement is reached without going to court (regardless of when separation occurred) then it is a good idea to formalise that agreement. That can be done by Consent Orders approved by the Family Court, or by way of financial agreement.

In de facto relationships one spouse may be entitled to spousal maintenance. If the parties separated on or after 1 March 2009, then the principles are as outlined above for married people. If the parties separated prior to 1 March 2009, then spousal maintenance can be obtained, but on a more restricted basis.

Disclaimer - This article is offered for general information purposes only. It is not offered as and does not constitute specific legal advice or opinion. The accuracy of the information is not guaranteed. You should not act or rely upon any of the information contained within this article without seeking the advice of a qualified solicitor who specialises in the particular area of expertise and jurisdiction that you require.