If you and your partner are planning to get a divorce, you may be wondering what lies ahead regarding your property and financial settlements/division. This can be a trying time for many and can add to an already stressful and emotionally taxing time, which is why coming up with a practical way of sorting out your assets and liabilities is key. In today’s article, we dive into some of the important aspects of property and financial settlements under Family Law in order to help you better understand where you stand, so read on to find out more.
Consent Orders vs Financial Orders
The first thing a couple needs to decide on is whether they are willing to come to a mutual agreement regarding property and financial settlements. Couples who are able to agree on how assets are divided needn’t involve the courts in the process but will have to apply for consent orders in order to formalise the agreement. As with most legal cases, this mediation process
is always favoured over going to court and can greatly cut down on legal fees, time and the stresses associated with battling a case at court.
Now that we’ve covered consent orders, let’s dive into financial orders. It will come as no surprise that there are many instances in which couples are unable to reach an agreement regarding settlement, and this is where financial orders come to play. Couples who are unable to resolve settlement-related conflicts are able to apply to the Family Court and F.C.C. for financial orders including orders related to the division of property and/or payment of spousal maintenance. One of the downsides of a court-ordered financial order is that no one can guarantee you what decisions a judicial offer will make -- in other words, it will be up to the courts to decide what is fair and equitable based on the individual circumstances of your case.
One thing to keep in mind is that married couples are required to make applications for property and financial settlements within 12 months of a divorce becoming final. De-facto partners are granted a timeframe of up to 2 years after the breakdown of the relationship. Failing to adhere to these time restrictions will require special permission of a court which is not always granted.
What Do The Courts Take Into Consideration?
Asset Pool -
Some of the main things that the courts will take into consideration include an evaluation of your assets, liabilities and superannuation available for division between both parties. This is often referred to as an “asset pool” and is determined at the time of trial (time during separation does not count).
The second step involves a full assessment of both parties’ contributions to the relationship
. These contributions can be broken down into three categories -- financial, non-financial and homemaker contributions. Financial contributions include salaries, business income, investment income, any inheritance received and or gifts received. Non-financial contributions include contributions from either party that increase the value of the asset pool (home renovations, upgrades etc). Lastly, homemaker contributions include caring for the home, children and other aspects of family life even if said responsibilities do not have a monetary value attached to them.
Future Needs -
The third factor that the courts will take into account are the future needs of each party. They will look into matters such as age, health, earning capacity, caring for children, financial resources, the standard of living, superannuation eligibility and the financial circumstances of a new household should either party be re-partnered.
Deciding What Is Fair and Equitable
What is “fair and equitable” to one couple may not be viewed in the same manner as another couple, which is why each and every property/financial settlement
case is unique. After thoroughly assessing the asset pool, contributions and future needs of both parties, the courts make a careful decision that is deemed as fair as possible to each party involved.
How Can Oxford Partners Help You?
At Oxford Partners, we have a number of experienced lawyers who practice exclusively in the area of family law. We aim to provide highly personalised service, whether that be informing you of your rights and obligations, assisting you in mediation/dispute resolution or representing you in contested proceedings in the Family Court and Federal Circuit Court of Australia. To find out more about how we can help you with your property and financial settlements, call us at (03) 9670 7577