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      Property Settlements in Australia

      Property Settlements in Australia

      Property Settlements in Australia 1024 651 Dorter

      When a long-term relationship, like a marriage or de facto relationship ends, one of the most challenging aspects to work your way through is deciding how to divide your assets and property.

      The division of assets is known as a property settlement and the family law system has provided people in Australia with a variety of options when it comes to working out how you will divide your assets.

      While this flexibility can be beneficial, it can leave some people not knowing where to begin. The property settlement process involves considering a wide range of factors and a wide range of assets.

      To help you understand property settlements in Australia, we’ve put together an overview of the property settlement process.

      Keep reading to learn more.

      What is a property settlement?

      A property settlement is the process of dividing assets, property, and liabilities between separating or divorcing couples.

      This legal process has been designed to ensure that there is a fair and equitable distribution of the property and liabilities when a relationship ends.

      Property settlements can be reached through various means, including negotiation, mediation, and court proceedings. We will discuss these options in more detail later on, however, it’s important to note that the way a property settlement is resolved in one situation may differ from another as the outcome is dependent on many different factors.

      Who is eligible for a property settlement?

      In Australia, property settlements are available to both married couples and de facto couples (including same-sex couples) who have experienced a breakdown of their relationship.

      Married couples who are seeking a divorce are eligible for a property settlement under the Family Law Act 1975. The entitlement to a property settlement applies to couples who are legally married under Australian law.

      For de facto couples, couples that have lived together in a genuine domestic relationship for a certain period are also entitled to a property settlement. The exact criteria for being considered a de facto couple can vary slightly between different Australian states and territories, but generally, it involves factors such as the length of the relationship, whether the couple lived together, and whether they presented themselves as a couple to the public.

      For more information on de facto relationships, read this article here.

      What is included in a property settlement?

      A property settlement can include many different assets and liabilities. Below, we’ve put together a list of some of the more common types of assets and liabilities, but keep in mind that this list is not exhaustive.

      Assets

      • Real estate, land, and property
      • Trusts
      • Companies
      • Shares
      • Investments
      • Businesses
      • Money
      • Superannuation
      • Inheritances
      • Motor vehicles

      Liabilities

      • Mortgages
      • Car loans
      • Personal loans
      • Credit Cards
      • Other debts

      It’s also important to be aware that the assets and liabilities included in a property settlement include those that are owned individually and jointly, as well as those that were acquired prior to, during and after the relationship has ended.

      To be sure all of your assets have been considered in your property settlement, we recommend speaking to an experienced family lawyer.

      How are assets divided in a property settlement?

      As we mentioned above, the way a property settlement happens and the split of the assets will differ from case to case, however, there is a general 4-step process for property settlements in Australia.

      Below is a summary of this process:

      Step 1: Identify all assets and liabilities

      This first step is very important in the property settlement process because to ensure a property settlement is just and equitable, all assets and liabilities must be identified.

      We recommend creating a master list (balance sheet) of all assets and property owned, as well as any debts and liabilities of each person individually and those that are owned and owed together.

      Failure to include all assets, whether intentional or not, could have serious consequences.

      Step 2: Identify the contributions of all parties

      Contributions incorporate a wide range of things, including financial and non-financial contributions, as well as direct and indirect contributions.

      Contributions include care provided to children.

      Seeking legal advice is beneficial during the property settlement process, particularly when it comes to working out the contributions of the parties as it can be easy to overlook some contributions.

      Step 3: Work out the future needs of each party

      Consideration of the ongoing and future needs of each party is important because there can be factors outside of an individual’s control that could limit their ability to be able to provide for themselves and dependents adequately in the future.

      Things to consider at this point are parenting responsibilities and arrangements, the ability of each party to earn an income, and the heath and age of each party.

      Step 4: Review the agreement

      The final step of the process involves reviewing the proposed agreement to ensure that it is fair and all of the factors we’ve mentioned have been considered.

      It’s a good idea to engage a family lawyer to review a property settlement agreement.

      How can you work out a property settlement?

      Like many other types of family law matters, people in Australia have a number of different options available to them when it comes to making a property settlement agreement.

      These options include:

      • Make a private agreement together

      The family law system in Australia encourages people to resolve matters and disputes between themselves and outside of the Court system where possible.

      In the instance of property settlements, former partners can reach an agreement together however they wish to do so. Once they reach an agreement it can be informal, or it can be formalised by applying to the Court for consent orders or creating a binding financial agreement.

      Before formalising an agreement, we highly recommend speaking to a family lawyer to ensure the agreement is fair.

      • Working with lawyers

      If you’re unable to reach an agreement or you would prefer the support of an experienced family lawyer, you can engage our services to help you negotiate and craft property settlement agreements. We can advise you, as well as negotiate and represent you through any property settlement proceedings.

      • Attend mediation

      Another option former spouses can try is mediation. This is a type of dispute resolution where a third-party mediator, who is impartial, can facilitate discussions and negotiations for property settlements (and other family law matters).

      Mediation is usually required before parties can apply to Court to resolve family law matters.

      • Apply to the court for property settlement orders

      Usually seen as a last resort, the former partners can apply to the Court for property settlement orders if they have exhausted all other options.

      The Court will use the same general 4-step process discussed earlier to create property settlement orders.

      This option ensures that a property settlement will occur, however, it takes away control of the situation from the parties which can result in orders that may not be favourable to you.

      How long do you have to apply for property settlement orders?

      There are strict time limits for applying to the Court for property settlement orders. For couples who were married, an application for property settlement orders must be made within 12 months after the date the divorce order is in effect. De facto couples have 24 months from the date of separation to apply for property settlement orders.

      While this may seem like a long period of time, it’s important to note that applying for property settlement orders cannot occur unless all other avenues have been explored, including mediation. So, it’s important to get moving on your property settlement sooner rather than later in case you do need to apply to the Court.

      If you do miss the time limit for making an application for property settlement orders, it could still be possible to apply for them. You will first need to apply to court for leave(permission) to be able to apply for the property settlement orders. The Court may grant leave, however, it is at their discretion and usually only occurs in exceptional circumstances, such as when a person is likely to experience hardship if the application cannot progress.

      Working with a family lawyer in this situation is also highly recommended as they can provide guidance throughout your various applications.

      Is there a way to protect assets?

      An agreement such as a prenuptial agreement, formally known as a binding financial agreement (BFA) is an option parties have to try to protect their assets from division in a property settlement if the relationship ends.

      A prenup or BFA can outline how assets are to be treated in the event of a separation or divorce and they can be customised to deal with a wide range of assets and matters, or they could be specific to one or two items.

      These agreements are generally enforceable and legally binding, as long as the agreement has been made lawfully. The Court could set aside the agreement if certain conditions have not been met, such as the agreement was made under duress or a party didn’t receive independent legal advice.

      If you’re concerned about protecting your assets, we highly recommend speaking to a family lawyer to understand all of your options.

      Do you need a lawyer to work out a property settlement in Australia?

      No, like most family law matters, you don’t have to use the services of a lawyer in order to come to a property settlement agreement.

      However, while it is not mandatory, working with a lawyer has benefits. For example, a family lawyer can help you to understand all of the options available to you, they can help to know where you stand and the requirements of you, as well as drafting and reviewing agreements and negotiating on your behalf.

      Are you looking for a property settlement lawyer in Australia?

      Whether you’re considering separation, you’re already working on a property settlement, or you’ve hit an obstacle in your separation process, we’re here to help you.

      We have an experienced team of family lawyers who can help you understand all of your options and resolve your disputes in a timely and effective manner.

      You can discuss your situation with us in a no obligation consultation. Book online here or call us on +61 2 9929 8840.