Division of Property: How To Negotiate a Property Settlement After Divorce
The moment two people realise their relationship is over and decide to separate or divorce is often one of the most emotionally charged experiences anyone can go through in life.
And while it’s understandable that you and your former de facto partner or spouse may want to rush this difficult process, it is important you make level-headed and concentrated decisions when dividing your finances and property.
There are various ways to go about doing this:
- You and your former de facto partner or spouse can negotiate an amicable solution as to how you divide your property without any involvement by the Family Court,
- You can apply for consent orders in the Family Court to formalise any agreement you reach with your former de facto partner or spouse, or
- You can file an application for property and/or financial orders in the Family Court if you and your former de facto partner or spouse cannot reach an agreement.
What are the pros and cons?
Coming to a mutual arrangement in which both parties agree to the division of your finances and property is preferable from the point of view that it would lessen the emotional and financial cost involved with legal proceedings.
In addition, resolving things amicably allows for the possibility of maintaining healthy, continuing relationships as parents (if you have children).
But why have your agreement formalised in the Family Court? So that you and your former de facto partner or spouse will have the peace of mind that comes with knowing your finances and property will be divided exactly as agreed.
Alternatively, if you do need to go through the Family Court to find a resolution, just know that there is no one formula for deciding who gets what.
General principles of the Family Law Act 1975
When deciding on financial disputes, the Family Court observes a number of general principles as set out by the Family Law Act 1975.
These principles apply to all couples regardless of whether two parties were in a marriage or de facto relationship.
A judicial officer will base their decision on what is deemed fair and equitable after all relevant evidence is considered. The determining factors include:
- The value of your individual assets and debts and what they’re worth,
- What direct financial contributions were made to the relationship by each party (wages, salary, etc.),
- What indirect contributions were made to the relationship by each party (gifts, inheritances, etc.),
- What non-financial contributions were made to the relationship by each party (child raising, homemaking, etc.), and
- Other external factors like age, health, the ability to care for children and the future earning potential of each party.
As a result, any decision handed down will be based on your family’s unique set of circumstances. This makes it difficult to predict a likely result.
Going through this process may put increased pressure upon you and your family and it is advisable you seek legal advice before engaging with and taking the matter to court.
Time limits on applications
In Australia, the courts observe two specified deadlines as they relate to:
- Spouses exiting a marriage: Applications must be submitted within 12 months of the date the divorce is made final, and
- Partners exiting a de facto relationship: Applications must be made within 24 months of the dissolution of the relationship
If an application is not received during these time limits, you will need the express permission of a court before you can proceed — something which is not always granted.
More than just about material possessions
While the courts may deal in allocating blame and recompense, there is much more to separation and divorce. Aside from being confronted by a profound level of grief, couples are thrust into a daunting period of uncertainty that brings with it a number of troubling questions.
Questions about where people will be living, what impact it would have on the children if they were to change schools, juggling finances, what the current job market is like and when life will begin getting back to normal.
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All information on this site is general information only, and does not constitute specific legal advice. Please consult one of our experienced legal team for specific advice relevant to your situation.