The Basics of Family Law Property Settlement NSW

This article will discuss the basics of family law property settlement. The Family Law Act 1975 governs property settlement in Australia for both married and de facto couples. It also provides a framework to ensure a fair outcome, taking into account individual circumstances.

Family law property settlement is the process of formally dividing assets and liabilities accumulated during a marriage or de facto relationship following separation. This aims for a “just and equitable” division, meaning a fair distribution that doesn’t necessarily imply a 50/50 split.

In this article, we will tackle essential information related to property settlement in Australia, particularly:

1. Family law provisions
2. Property settlement process
3. Formalising a property settlement
4. Frequently asked questions

Family Law Property Settlement Provisions

Here are some Australian family law property settlement provisions that you must know when it comes to the settlement of property:

1. Section 78 – Declaration of property interests: In proceedings between the parties to a marriage with respect to existing title or rights in respect of property, the court may declare the title or rights, if any, that a party has in respect of the property. Where a court makes such a declaration, it may make consequential orders to give effect to the declaration, including orders as to sale or partition and interim or permanent orders as to possession.

2. Section 79 – Alteration of property interests: During property settlement proceedings, the family court may make such order as it considers appropriate in the case of proceedings with respect to the:

• property of the parties to the marriage or either of them–altering the interests of the parties to the marriage in the property; or
• vested bankruptcy property in relation to a bankrupt party to the marriage–altering the interests of the bankruptcy trustee in the vested bankruptcy property.

This includes:

1. an order for a settlement of property in substitution for any interest in the property; and
2. an order requiring either or both of the parties to the marriage or the relevant bankruptcy trustee (if any) to make, for the benefit of either or both of the parties to the marriage or a child of the marriage, such settlement or transfer of property as the court determines.

READ: FLA Orders and Financial Agreements

3. Section 90D – Financial agreements after issuance of a divorce order: The parties to the former marriage make a written agreement concerning any of the following matters:

• Manner of dealing with any of the property or financial resources that either or both of the spouse parties had or acquired during the former marriage.
• Maintenance of either of the spouse parties.

How Does the Court Decide on Family Law Property Settlement?

The court follows a general four-step process:

1. Identifying the Asset Pool – The first step involves determining all assets and liabilities of both parties, regardless of who holds the legal title. This includes property, superannuation, investments, businesses, personal debts, etc.
2. Contribution Assessment – This involves the evaluation of both direct financial contributions (e.g., income, inheritances) and indirect financial contributions or non-financial contributions (e.g., homemaking, childcare, supporting a partner’s career) made by each party during the relationship.
3. Considering Future Needs – The examination of factors like age, health, earning capacity, and childcare responsibilities to ensure a fair outcome considering each person’s ability to move forward financially is the focus of this step. One person may also need financial support from the other, either for themselves in the form of spousal or de facto maintenance
4. Just and Equitable Test – The court decides if the proposed division is fair in the context of all the above factors.

Ways to Formalise Family Law Property Settlement

These are the ways to formalise property settlement:

1. Consent Orders – If both parties have come to an agreement over parenting, finances, or property arrangements and would like to formalise the agreement to make it legally binding, you can file for consent orders.
2. Binding financial agreements – These are also called prenuptial agreements. A BFA is a legally binding contract outlining asset division. BFAs can be made before, during, or after a relationship.
3. Court order – If the parties cannot reach an agreement, the court will determine how they should divide the property.

READ:

1.  Financial Agreements Family Law
2. De Facto Financial Agreements
3. Other Provisions about Financial Agreements

Why is there a need to formalise property settlement? Formalising property settlements is important for several reasons:

1. It creates a legally binding contract. Thus, there is a sense of obligation on the parties to comply with the terms.
2. It shields assets acquired after the separation from future claims by a former partner.
3. It significantly reduces the chance of expensive and stressful legal battles in the future.
4. It provides clear ownership of assets, allowing you to make financial decisions accordingly.

FAQs on Family Law Property Settlement

1. Is it always a 50/50 split? 

No, the goal is a “just and equitable” division, not necessarily equal.

2. Does it include superannuation? 

Yes, superannuation (retirement savings) is treated as an asset and can be split.

3. Are there time limits? 

Yes, you generally have 12 months after a divorce or 2 years after the end of a de facto relationship to apply.

4. Do we have to go to court? 

Not necessarily. You can reach an agreement through negotiation, mediation, or collaborative law, and then formalise it. Before you sign your documents, you should both get independent legal advice about whether it is a fair agreement. This is why it is important for both parties in a divorce to seek legal advice from a family lawyer.

5. Do all separating couples need property settlement?

Yes, finalising financial ties is essential to avoid future disputes.

6. How can I prepare for a property settlement meeting?

Here’s what you can do in preparation for your meeting:

1. Consult with family lawyers to receive expert guidance on property settlement matters, ensuring your rights and interests are protected throughout the process.
2. Prepare copies of financial documents such as pay stubs, benefits information, mortgage statements, income tax returns, and details of monthly expenses to present during the settlement conference.
3. Engage in open and honest discussions during the settlement conference, actively listening to the other party’s perspectives and presenting your views clearly.
4. Explore various settlement options, such as changing loan terms, paying owed amounts over time, short sales, or deeds in lieu of foreclosure, depending on the context of the property settlement meeting.

Consult a Lawyer Today

If you don’t know where to start, talk to a property settlement lawyer first. JB Solicitors is a group of skilled and experienced lawyers who can explain your legal rights and entitlements regarding property settlement under the Family Law Act.

Our lawyers will act as a bridge between you and your former partner, facilitating productive negotiation and minimising conflict.

For more information, don’t hesitate to contact us through this link. Schedule a consultation today!