One of the major aspects of divorce proceedings often involves property settlements. Questions such as “where will I live?”, “where will my children live?” and “will I still have a roof over my head?” are ominous thoughts that loom over one during a separation or divorce. Such sensitive and life-changing matters are not to be taken lightly, which is why we are here for you during these trying times. In today’s article, we have a look into how the negotiation of a property settlement works, so read on to find out more.
Time Is Of The Essence
One of the most important factors to consider during property settlement in time. Negotiation is a time sensitive matter, and it is crucial to be aware that legally, there is a time limit for property settlements after divorce. This time limit is often referred to as the limitation period, and it is during this time that you are required to file proceedings for your property settlement. In most instances, the time limit is 1 year after the date of your divorce for divorced couples, and 2 years after separation for de facto couples.
Who Gets What?
When it comes to who gets what, the waters get murky. Legally, there is no “official” way of calculating family law property settlements which is why taking the following factors into consideration is imperative:
What has each spouse contributed over the years to the overall acquisition of the property?
What are the future needs of each spouse?
Is the desired property division one that is equitable, just and fair?
What is the net pool that is available for division?
Taking into consideration these factors, you will then be able to negotiate a fair and just property settlement. It is also highly advised that each individual involved in the settlement pays great attention to collecting and compiling financial paperwork as soon as possible. This paperwork may include documents such as bank statements, tax returns, pay slips and anything else that can provide a clear picture of the property values involved. Oftentimes, ex-partners are also required to exchange financial documentation with each other, and it's important that you ensure that you are as honest as possible when sharing this information. In certain cases, you may even have to obtain valuations of property values if you are in dispute. Based on all this information, both (ex) spouses will then have to come to an agreement on the value of each of the assets shared. It is also important to note that each case is unique in nature, and will depend on the individual circumstances of your family. No one settlement looks like another, so it is wise to avoid trying to source information or advice from anyone else besides your lawyer.
Calculating The Net Pool
Calculating the net pool is the first step in determining your property settlement. It is important that parties remain honest and upfront about their finances and financial situation in order for this first and integral step to allow for future negotiation. In property settlements, contributions taken into account include financial contributions such as gifts, inheritances and assets that were owned by each individual prior to moving in with each other. Non financial contributions are also taken into consideration, and may include things such as who took care of the home, if renovations were made and so on. Lastly, homemaker contributions take into account if one spouse is or was a stay at home parent, took care of children the majority of the time and domestic duties such as cleaning, cooking, laundry and so on.
What About Future Needs?
Future needs of each spouse are also something that will be looked into during property settlement. This may include:
Health of both parties
Income of both parties (if one earns less than the other)
Who cares for the children
Just and equitable requests
The Final Outcome
To reach the final outcome of your settlement, it must be deemed that the result is one that is both just and equitable to both parties. The settlement will often result in a division of the pool of property, and it is highly recommended that this decision is properly formalised in order to be seen as a legal agreement, regardless of whether you came to the decision amicably or not. We strongly advise that both parties heed advice from experts and lawyers that will be able to advise on individual circumstances in order to find the best way forward in finalising your property settlement after divorce.