What is the difference between a property settlement and a divorce?
A divorce and a property settlement are two different legal processes.
A property settlement is the formal division of property following a couple separating. Discussions regarding the division of assets can occur as soon as a couple separates.
A divorce is the legal termination of the marriage and will allow the parties to remarry. You must wait 12 months from the date of separation before you can apply for a divorce.
You can formalise your property settlement without applying for a divorce.
We were in a de facto relationship… can we still apply to the Court for property Orders?
Yes. The Family Law Act 1975 contains mirror provisions that apply to both married and de facto couples.
What constitutes a de facto relationship?
A de facto relationship exists where a couple has been living together on a “genuine domestic relationship” and they have either: been living together for at least 2 years; or
there is a child of the relationship; or
it would be unjust not to recognise a de facto spouse’s financial or non-financial contributions.
After a couple separates, how do you determine who gets what in a property settlement?
The steps in working out the appropriate division of property following separation are as follows:
First, we need to agree on the value of the assets and debts of each party.
Second, we need to look at who has contributed what to the relationship, both financially and non-financially.
Third, we need to assess any factors which will affect the individuals into the future, such as the arrangements for children and the income of each party.
Finally, the overall outcome must be “just and equitable”.
After we have reached an agreement, how can we make our property settlement legally binding and what are the benefits?
There are two ways to make a property settlement legally binding:
The first is to file terms of settlement or Orders with the Family Court of Australia; and
The second is enter into a Binding Financial Agreement – this can only be done with lawyers advising both parties independently.
Some benefits of the agreement being legally finalised are that it provides certainty and finality, it can help protect assets acquired post separation, and there may also be stamp duty and capital gains tax advantages.
Who pays the mortgage after separation?
This question is often integral to property settlement discussions post-separation, when budgets are stretched to their absolute maximum.
The first and most important thing to remember is that if the mortgage is in ‘joint names’, then both parties are legally responsible for the payment of the mortgage. If the mortgage repayments are not made and the mortgage is defaulted, then the bank will want to take possession of the property and sell it.
The financial ramifications, either with the mortgagee and/or in the Family Court, can be serious if you make the wrong decision in relation to your mortgage repayments.
We can help you decide on, and implement, the best option to minimise any negative impacts on you arising from your ongoing mortgage debt.
How do you stop the disposal of assets in a property settlement?
Assets include property such as money, business assets, shares, cars etc.
To prevent a disposal of assets, you can apply to the Court for injunctive orders. You need to show that dissipation of the assets is imminent or possible.
We encourage clients to seek legal advice as early as possible following their separation, or even when they start contemplating it. This enables clients to minimise the risk of their premature informal distribution or dissipation of property of the relationship.
What are the time limits for commencing property proceedings?
Parties in a de facto relationship can commence Court proceedings for their property settlement from the day they separate until two years after separation.
Married spouses have only twelve months to commence proceedings after the date their divorce is finalised. If the parties are not yet divorced, they are not restricted by any time limitations.
There are some exemptions to these rules. A party may seek the Court’s permission to commence proceedings out of time if they can prove they would otherwise suffer hardship if their case was not heard.
If you aren’t sure whether you may be out of time to formalise your property settlement, contact us and we can advise you of your position and different options.
How do you value property like the family home?
The value of all property within the property pool must be ascertained and agreed before it can be divided.
The cheaper alternative is to obtain a few market appraisals and take the median figure. However, it is important to note the value a real estate agent attributes to the property would be higher than a bank value as the valuations are undertaken for different purposes.
What if you can’t agree?
If you cannot agree, you and your former partner would jointly instruct a property valuer. The property valuer will provide a detailed report at a cost to the parties. Alternatively, if proceedings are on foot, the Court may appoint an independent valuer.
Do I have to tell my ex how much I have in my superannuation and/or the bank when going to Court for my property settlement?
When Court proceedings are on foot, each party has a duty to the court and to each other to give full and frank disclosure of all information relevant to the case.
Parties must fully disclose their financial circumstances to the other party, which may include providing bank statements, superannuation statements and tax returns, among other things.
This duty to disclose is ongoing from the day pre-action property settlement negotiations commence until the case is finalised.
Failure to comply with this obligation could result in punishment, including being ordered to pay costs, having whole or part of the case dismissed or being found guilty of contempt of court.
I have recently separated, what do I do now?
A family law separation will be one of the biggest emotional and financially important decisions of your life. At Turnbull Hill Lawyers we understand that separation is difficult, however it is extremely important that you obtain specialised legal advice. This allows you to make an informed decision about what you are entitled to when dividing your assets and what the law states about the care arrangements for your children.
Contact us and let us point you in the right direction with our First Step Package. It is designed for those taking their first steps following separation.