When a relationship ends, the process of working out who gets what is known as a property settlement.
It is important to note that the family law legislation in Australia has some very specific rules about what can be included in a property settlement and when it will be binding. These are the most important things to remember:
Property settlement – a verbal agreement or simple written agreement is not binding
It is not uncommon for the parties to agree on how the assets and liabilities of the relationship should be distributed. While it is much cheaper to reach an agreement without costly litigation, if that agreement is not documented correctly, there is the potential for the other party to come back for a second round.
Get legal advice to determine whether any verbal or written agreement will be relevant.
Beware of delay – the property pool is not assessed from the date of separation
The courts operate on the value of your assets, liabilities and superannuation at the time of the hearing or property settlement negotiations, not at the time of separation. What has happened since separation might be relevant to what each party gets but the current value is the starting point for the court. Some examples of how this could impact a property settlement are set out below:
- You and your former spouse separated two years ago but are not divorced.
- You work in the mines earning in excess of $150,000.00 a year.
- Your former spouse cares for your young children and is not employed.
- Since separation, your superannuation has increased considerably.
In this scenario, your former spouse could be entitled to a percentage of your superannuation, including the contributions made to superannuation since the date of separation. You should seek legal advice about how the court might approach money that has been accrued.
- You and your former de facto partner separated less than 12 months ago.
- At the date of separation, there was $60,000.00 in a joint savings account.
- Since separation, your former de facto partner has spent the entire $60,000.00.
In this scenario, what the $60,000.00 has been spent on (there is a difference between spending the money on groceries versus gambling for example), will affect how the $60,000.00 is to be treated. You should seek legal advice about how the court might approach money that has been spent.
Is there a time limit for property settlement?
Time limits apply which can prohibit a person from making an application to the court for property orders. The amount of time you have will depend on the type of relationship you were in:
- Married couple: 1 year from the date of divorce. You can get divorced 1 year after separating.
- De facto couple: 2 years from the date of separation
If you have not finalised your property settlement or commenced court proceedings within the relevant timeframe, you will need to ask the court for leave to file an application for a property settlement. The court will only allow you to extend the time limit in certain circumstances but you should never take the risk and always finalise a property settlement within the time limit wherever possible. You should seek legal advice about your options if outside the time limit.
It is important that you seek legal advice shortly after separation, as delay is often costly. The Family Law team at Wallace and Wallace Lawyers can provide advice and assistance with all steps involved in negotiating and finalising your property settlement.
Please do not hesitate to contact our office on (07) 4963 2000 or via our online contact form should you have any queries.