You can apply to the Family Court or Federal Magistrate’s Court for orders for property settlement at any time up to 12 months after your divorce.
It is desirable for separating couples to try and reach agreement regarding the division of their assets. The Courts required parties to make a genuine effort to reach agreement, and parties are required to exchange relevant information and attempt to reach an agreement before commencing court proceedings.
Rules governing the division of assets are complex, and we recommend that you should seek legal advice from us before making a final decision.
How does a Court decide on Property Orders?
The court uses a four-step process.
Step 1:Ascertaining the Net Asset Pool
The general rule is that all assets must be taken into account, whether they are acquired before or during the marriage or after the separation.
The definition of “property” is very wide. It includes almost everything of value. “Property” includes assets of either or both of the parties, such as real estate, shares, cars, jewellery, savings, furniture and effects. Superannuation is treated differently and, depending on the type of value fund, it may be divided (split) at the time that a property order is made.
The Court must also consider the financial resources of the parties. These can be funds or assets over which a party has influence or control or (in certain circumstances) prospective entitlements.
In ascertaining the net assets of the parties, valuation issues frequently arise. Taxation (including capital gains tax), stamp duties and other issues also arise. It is important for parties to have appropriate legal advice to ensure that all those issues are taken into account where appropriate.
Step 2: Contributions to the Net Asset Pool
The next step is to assess each party’s contribution to the marriage, both financial and non-financial, and also assess the contribution made as homemaker or parent. Initial contributions (such as what you bring into a marriage) can be relevant as are gifts and inheritances and other “out of the ordinary” monies received during the marriage.
Step 3: Future Needs
The next step is to assess the future needs of both parties, taking into account a range of things, including:
- income earning capacity
- the property of each party
- whether the party has the care or support of children
- the financial circumstances of any new relationship
Where appropriate, an adjustment to the “contributions based” result can be made as a result of the consideration of those factors.
Step 4: Effect to be Just and Equitable
The final step is to consider the practical effect of any proposed settlement, to achieve a result which is just and equitable in all the circumstances.
For example, the court has the power to split superannuation entitlements between separating spouses. The fourth step of the process will sometimes include a consideration of the appropriate blend of any settlement between immediately available assets, and deferred but important benefits such as superannuation.
If you reach agreement with your former partner regarding property settlement, there are two ways of formalizing that agreement:
- Consent Orders through the court;
- Making a Financial Agreement which is binding under the Family Law Act.
We can advise you as to which of those options is more appropriate for your circumstances.
In any property settlement, both parties have a clear obligation to make full and frank disclosure about their respective financial circumstances. A failure to make proper disclosure of a relevant matter can have very serious consequences.
In certain circumstances, separating couples can have an obligation to provide ongoing maintenance for their former partner.
In broad terms, you can be liable to pay ongoing support for your former spouse if:
- Your former spouse is unable to adequately support himself or herself so that their reasonable needs are met; and
- You have the capacity to do so.
Issues surrounding spousal maintenance can be complicated, and will often need to be considered as part of an overall settlement of financial matters. We advise that you should seek legal advice from us in relation to those issues.
If you would like use to help you with Property Division please contact us.