If you and your partner or spouse are making the choice to split up or get a divorce, one of the most important things to consider is property settlement. Property settlement is the division of any property that you own and The Family Law Act provides for property settlements between couples who have been married or in a de-facto relationship. In today’s article, we have a look at everything you need to know about divorce property settlement, so read on to find out more.
Sorting Out The Division of Property
The first step towards property settlements under the Family Law Act is deciding or figuring out how your property is going to be divided. There are a few ways in which this can be done:1. Mutual AgreementIn a situation where you and your former spouse can mutually agree on how your property should be divided, there will be no need for any court involvement. You can also seek to formalise your agreement by simply applying for consent orders in the Family Court. A consent order is a great way to ensure that your agreement is binding and enforceable, and also may offer you some tax benefits depending on your individual case. 2. Inability To Reach an AgreementIn some situations, you will find that both parties are unable to come to a mutual agreement. When this happens, it is important that you apply to a court for financial orders and any other orders related to the division of property and/or maintenance payments for your spouse. Most property settlements are dealt with by either the Family Court or the Federal Circuit Court, and most property settlement applications end up getting settled without a decision being made by the Court. In situations where settlement is not achieved, the Courts will proceed to decide on how the property should be divided after a hearing before a judge.
The 4 Step Process
If and when you decide to apply for a property settlement, the Court will determine your application by the way of what is known as a “4 Step Process”. Step 1: Identifying/Valuing assets, liabilities and financial resources of both partiesStep one involves identifying and valuing the assets, liabilities and financial resources of both parties involved in the settlement. This is a simple process in the majority of cases, but may be more complex if businesses are involved. In such a situation, it is always recommended to involve specialist experts who will be able to assist in the matter. Step 2 – Assessing the contributions of both partiesThe second step in the 4 step process is to assess the contributions made by both parties during the duration of the relationship. Contributions can include:
Indirect or direct financial contributions to a shared property
Contributions to the household/welfare of the family in the capacity of a parent or homemaker
Do note that in most cases, especially when long term relationships are being assessed, the Court will find that both parties have contributed equally. Some of the reasons as to why the Court may in certain circumstances find the contributions to not be equal include: - Short term relationships with no children involved
Situations where one party entered the relationship with significantly more assets than the other party
Situations where one party makes a substantial contribution through personal injury settlement, inheritance or family gifts
Situations where reckless conduct of one party resulted in a loss to the other party’s assets
Step 3 – Assessing Future Needs The third step is to assess the future needs of both parties. The Court will consider factors such as:
Income, property and financial resources of both parties
Capacity for employment
Age and health of both parties
Who has the care of children under 18
Eligibility for pension
If one party is living with someone else and the financial circumstances of that household
In considering these factors, the Court will then decide on whether adjustments should be made in favour of one party to compensate for future circumstances. Step 4 – Fair and Just OutcomeAfter steps 1-3, the Court will then decide on whether the proposed property settlement is one that is fair and just for both parties. This assessment is done with a holistic examination of circumstances involved in the case.
How Can We Assist You?
At Oxford Partners, we have an expert team of lawyers who practise exclusively in the area of family law. We aim to provide you with a service that is tailored to your individual circumstances, regardless of how complex or simple the situation may be. Where appropriate we will work with your other advisers, such as your accountant in order to get a clear understanding of all aspects of your case and provide you with the best possible services and representation. Call us at 03 9670 7577 today!
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