When a marriage or de facto relationship ends, a division of property and financial assets must naturally follow. This represents ending financial ties with the former partner and is generally one of the most contentious issues during a separation.
Because of the social implications and stigmas surrounding this area of family law there are a range of misunderstandings people have as to how it really works. Each case will be vastly different from the last and there is no ‘one size fits all’ approach.
For these reasons it’s incredibly important for anyone going through a separation to get in contact with experienced property settlement lawyers. This will allow them to receive quality counsel and representation on this delicate area of family law.
The following explores a range of facts about property settlement that everyone should become familiar with.
How Property is Defined Under Family Law
Property does not just constitute the family home or what’s in the bank account, it actually has quite a broad definition in the case of dividing assets.
Other assets that are considered include superannuation, interest stakes in a business or company, valuable items such as paintings and jewellery as well as intellectual property to name a few.
Essentially, anything that has monetary value is considered property by the family law system and is subject to redistribution when dividing assets after separation.
A 50/50 Split is Rare
In Australia there is no legal presumption that couples who separate will need to split their assets equally. This is not to say that the division of property is not designed to be equitable as an even division is not necessarily a fair one.
The court takes into account a variety of contributions made by each party to the relationship. Whereas one party may have provided the majority of financial contributions, the other may have dedicated more time to child rearing and housekeeping.
When a spouse dedicates their time to raising children, they will most likely take time off from or give up their careers. This fact is taken into consideration by the court in determining that person’s future ability to provide for themselves and any children.
Issues like domestic violence are also taken into consideration in the division of assets. Where one party’s continued contribution to the relationship may have been more arduous than it should have been, that party will often receive a greater stake of the assets.
The consideration of these factors is designed to appropriately compensate each party for the time and resources they put into the relationship.
A Divorce is Not Necessary to Begin Property Settlement
Former couples need only demonstrate that they have separated from their relationship for them to begin property negotiations. However there are some limitations on when the division of assets can begin.
In most cases, people who were married must submit an application for division of assets within 12 months of their divorce being finalised. De facto couples must do this within 2 years of their separation. If proceedings are not commenced within these time frames then the parties may lose their rights to certain entitlements.
For these reasons separating parties should seek legal advice from experienced property settlement lawyers so that they can understand their specific rights and avoid ending up with less than compensation than what they are entitled to.
Most Cases do not need to be Settled in Court
The majority of asset divisions do not need to be taken to court or trial. The Australian family law system favours that separating parties come to their own negotiated settlement.
Even if a court hearing does become necessary, there are processes that encourage a mutual agreement without the need for a court order.
It is Important to Document a Property Settlement
Some former couples may separate on good terms with a mutual but informal agreement. This failure to create a legally binding decision can lead to one or both of the parties re-entering a dispute that may lead to litigation.
If both parties have successfully negotiated a division of assets then it should be finalised in official documentation. This is because friends, relatives and new partners all will have an opinion on the deal reached and may influence their party to ask for more.
It is extremely important to make the division of assets legally enforceable so as to avoid any misunderstandings and hostility in the future.
The division of assets is arguably the most important legal factor in any separation. It is not without its fair share of misconceptions that create false ideas about what is and isn’t achievable.
For these reasons it’s crucial for anyone going through a separation to secure the counsel of experienced property settlement lawyers to make sure they get everything they’re entitled to.