Property settlement in WA is the legal process of dividing a couple’s finances and assets after a relationship breakdown. It is a common misconception that each partner will get a 50:50 share following a divorce. However, this is not true since not all cases are the same in Western Australia or any other Australian state. Each couple in a divorce has a different kind of:
- Lifestyle
- Opinion on how they will divide property, finances and assets
- Current and future needs
- Children and how much care and financial support they need
- Financial positions
- Earning capacities
- Marital property
- Financial resources
- Financial and non-financial contributions to the relationship
- Asset pools
- Liabilities
- Debts
In general, “property” encompasses anything of value such as real estate, cars, boats, bank accounts, etc. Businesses and superannuation are also included during property settlement procedures. These factors will ultimately dictate how to approach property settlement WA. This article will outline how to approach property settlement in Western Australia.
How Property Settlement WA Affects a De Facto Relationship
Couples in de facto relationships are couples who are living on a genuine domestic basis (cohabiting) while having sexual relations. While this type of relationship sounds like an average marriage, de facto couples are not legally “married”. A couple needs to be together for at least 2 years in order to qualify as a de facto couple. The Family Court of Western Australia considers the following during de facto property settlement cases:
- Financial dependence
- Ownership of property
- Whether there are children involved
- Same-sex relationships
The family court may recognise a de facto relationship if there is a child under the age of 18 even if the couple has not reached the two-year mark. Moreover, the family court may recognise a de facto relationship if the partner seeking property settlement made non-financial and financial contributions to the relationship.
There is only one current difference in de facto cases at least in Western Australia. This is the family court’s inability to “split” the parties’ superannuation entitlements. Superannuation refers to the employee’s accumulated money that his/her employer sets aside. In practice, superannuation is regarded as a financial resource rather than an asset.
A financial resource is an item or person from which a person can draw financial and monetary from. Financial resources are not strictly an asset that is possibly included in the relationship’s asset pool, such as houses or cars. During property settlement WA, parties must consider superannuation under the applicable and relevant legislation. However, this can result in unfair outcomes for the party with the least superannuation.
The Family Law Act 1975 and the Family Court Act 1997
The Family Court Act (WA) governs property settlements in Western Australia. Moreover, the Family Court Act also adopts the same time limits that apply to married parties in the Federal Circuit and Family Court of Australia. However, it also introduces time limits for parties to consider. Meanwhile, the Family Law Act governs property settlement for married and de facto couples except in Western Australia.
Inheritances In Property Settlements
Most, if not all couples, receive an inheritance from their deceased loved ones. Cars, homes, and businesses are some common examples of these inheritances. The Family Court of WA has discretion when handling division of assets during family law matters. A common approach is to include an inheritance received during or before the start of cohabitation in the asset pool.
The net asset pool is basically the legal term for all of a divorced couple’s assets and liabilities. However, inherited assets are sometimes treated differently than other assets in the relationship. The Family Court of WA takes a “two pools” approach and assesses each party’s contribution to the existence of the “two pools”. Here are several factors that influence how inheritance is handled during property settlement WA:
- How long did the parties’ relationship last?
- The size of the inheritance paid in relation to the total size of the pool for distribution;
- When in the relationship did the partner receive the inheritance? Was it before, during, or after the relationship ended?
- The benefactor’s relationship with each of the parties. This includes the intention of the benefactor that he/she has expressed during his/her lifetime.
- How the partner/partners spent or used the inheritance and if it is still intact.
What Happens When Couples Receive Substantial Gifts? Case Example
Property settlement WA always involves assessing monetary contributions to the relationship. Separating parties will have frequent disagreements about the significance and handling of gifts, especially if it’s from their families. However, the intended primary beneficiary of the gift is an important consideration.
For instance, Eugene and Auriel received a gift of $50,000 from Eugene’s family. However, the family court must determine whether the money was meant for the exclusive benefit of only Eugene, only Auriel, or both of them. The family court will most often rule that only one party will receive the gift.
Thus, this will have an impact on the evaluation of each party’s overall contributions and may require further adjustments. These adjustments may affect the outcome of Eugene and Auriel’s monetary contributions and ultimately the property settlement. Here are other significant factors in handling the $50,000 gift in our example:
- The length of Eugene and Auriel’s marriage
- When the gift was received
- The possibility of excluding substantial gifts from the asset pool if Eugene and Auriel had a short relationship
- The possibility of including substantial gifts as an asset of the marriage while possibly changing contributions in favour of the person who received them.
Property Settlement WA: Spousal and De Facto Maintenance
Spousal maintenance is one of the most important aspects to cover during a property settlement phase. This is a type of maintenance that requires a higher-earning person to financially support their lower-earning ex-partner. De facto maintenance applies to de facto relationships. After a divorce or separation, some partners (especially financially dependent ones) are left to adequately support themselves because:
- They are responsible for the care of a child who is under 18
- Their age and/or mental and physical health are preventing them from securing proper employment
- They cannot depend on their other family members for financial support
How Can We Help Avoid Lengthy Family Court Procedures?
Property settlement in WA involves lengthy family court proceedings if couples cannot settle their assets and financial division among themselves. Not all couples will agree with some division especially if they believe that they should receive more than what is given. However, couples may prevent all of these with a binding financial agreement (BFA).
A BFA essentially reduces the financial stress of separation since it allows couples to make a financial agreement before and after a relationship breakdown. JB Solicitors values a divorced couple’s time, assets, and finances. We believe that both couples’ future needs should be taken into account when going through a property settlement.
Hence, our family lawyers can help couples draft a binding financial agreement so they can amicably separate/divorce without the need for lengthy court actions. Should couples still fail to agree on property settlement matters, they can avail our mediation and arbitration services. We can also help with drafting consent orders for couples who are in agreement regarding their property settlements.
Contact us today if you want to learn more about your property settlement entitlements.
