Property settlement is a crucial aspect of any separation or divorce. In New South Wales (NSW), Australia, the law governs the division of properties between the parties involved in a relationship breakdown. The Family Law Act 1975 is the primary law that governs property settlements in Australia. This act applies to married couples and people in de facto relationships who have separated.
Typically, while deciding property division, monetary and non-monetary contributions are considered. It’s vital to acknowledge several factors that the Family Law Act may consider that you may not be aware of. These include payments for personal injury settlements, the pension benefits of both parties, future demands, each party’s potential earning power in the future, the health of the children and both parties, as well as financial resources such as anticipated future inheritances.
How Does a Proposed Property Settlement Work?
The Family Law Act urges parties to come to their property settlement agreements because they are usually quicker and less complicated to complete. Most importantly, it resolves all outstanding financial matters between the parties. The settlement of property involves:
- Creating a net asset pool and asset valuation;
- Assessing contributions to the collection of net assets;
- Estimating future requirements and adjustments; and
- Taking into account the planned property settlement’s practical effects.
In NSW, a property settlement can be reached through informal negotiations, asking the court to issue a consent order, or entering into a binding financial agreement. The court will consider a range of factors, including each party’s:
- Direct financial contributions
- Indirect financial contributions; and
- Non-financial contributions
- Future needs of both parties; and
- Children of the relationship.
There are two ways to formalise an agreement regarding property settlements:
1. Consent Orders. You can file for consent orders if both parties have reached an agreement about parenting and/or financial/property arrangements and wish to formalise the agreement to make it legally binding. Consent orders can also modify or terminate existing family law orders.
2. Binding Financial Agreements (BFAs). BFAs are also called ‘Prenuptial Agreements.’ These are agreements that outline what will happen in the event of a relationship breakdown in terms of property settlement and/or spousal maintenance.
Time Limits for Property Settlements
In family law proceedings, time limits apply to the process of settling property and determining spousal support obligations. In the event that you and your partner end your relationship, regardless of whether you were married or in a common-law union, you will be required to start the property settlement processes within the allotted amount of time. Below are the time limits set by the law:
- For married couples, an application must be lodged within 12 months of the divorce becoming final.
- For de facto couples, an application must be made within 24 months after the de facto relationship has ended.
What if You Missed the Time Limit?
You can still initiate proceedings even if you missed the time limit. However, applications filed beyond the deadline are subject to the Family Court’s judicial discretion for acceptance. Such applications can be financially and emotionally draining, as well as stressful and litigious. The Family Court has the last say on whether to approve or deny an out-of-time application.
An applicant who wishes to file an application outside of the prescribed statutory time of 12 months for married parties or two years for partners in a de facto relationship must show to the Court that the applicant or a child of the marriage will incur hardship because of the application’s denial. On a case-by-case basis, the Court will analyse the merits of each claim and whether or not hardship exists.
If there is a finding that the applicant will suffer hardship, there are other circumstances that the Court will also consider.
- the causes for the delay;
- the anticipated legal costs if the proceedings are to proceed; and
- the possible occurrence of prejudice to the other party if the application continues.
Information Your Lawyer Needs
A lawyer can help you go through the complex legal and financial aspects of property division and ensure that you receive a fair share of the assets. Your lawyer needs to obtain relevant information about your circumstances to successfully go through the process.
Generally, the more information you can supply to your property settlement lawyer concerning your personal and professional finances, the better off you will be. You should present the following information to your lawyer:
- Mortgage and bank documentation
- Pay slips and receipts for rent
- Bills and receipts showing family expenditures
- Tax filings
- Statements for loans, credit cards, and bank accounts
- Profit and loss statements for businesses
- Superannuation declarations
- Statements of Centrelink benefits
- Personal debts
- Evidence of children’s costs, including financial support provided such as school fees and activity bills
- Statements of share dividends and information on any other investments
To summarise, a property settlement is an essential component of the legal procedure that assures both parties receive an equitable share of the assets and financial resources associated with the relationship.
During the often stressful process of divorce or separation, the division of property can be a significant factor that needs time and attention. When getting a divorce, a person needs to have a thorough understanding of the process of property division so that they can ensure the best possible outcome for themselves and their children.
Why You Need Independent Legal Advice
Advice from a family lawyer regarding your entitlements and strategy, the process you need to follow as well as the legal traps to avoid, will help you negotiate and, if required, secure an acceptable outcome from the court following the breakdown of your partnership.
Thus, obtaining legal opinion before deciding what to do or applying to the courts is prudent. A lawyer can assist you in better understanding your legal rights and duties. They can also clarify how the law applies to your specific situation.
People with family relationship problems cannot get legal help from the court. If a person then appeals to the court for orders, this could substantially jeopardise how the court decides on a property settlement case.