This guide is intended to be general in nature, and Commins Hendriks Solicitors recommend you seek legal advice tailored to your needs before entering into a property settlement. Commins Hendriks’ team of family law professionals can help you with your questions.
If you and your partner separate it is important that you take the time to think about the division of any property the two of you own. The Family Law Act makes provision for a property settlement for couples that have been married or have been involved in de facto relationships. Depending on the value of the property involved Applications can be made to the Family Court of Australia, the Federal Circuit Court, or the Local Court. Commins Hendriks will be able to advise you which Court is most appropriate for you.
Relevant considerations in a property settlement
Step 1: Identifying and valuing the parties’ assets, liabilities and financial resources
The first step involves identifying all of the parties’ property – no matter how or when it was acquired, or whose name the property is in. That property is then ascribed a value. At times a formal valuation will be required.
Property includes all assets, liabilities and financial resources of the parties, including superannuation. Often this step is quite simple, however where businesses or complex financial structures are involved, it can become complicated and often requires the help of experts.
Step 2: Assessment of the contributions made by both parties
This involves the Court looking at who has contributed what to the relationship. The Court can examine the following:
- Any direct or indirect financial contributions;
- Any direct or indirect non-financial contributions; and
- Contributions to the overall care and welfare of the family, such as homemaker duties and caring for children.
Often the Court finds that contributions of the parties are equal. This is particularly the case in long relationships. However, examples of where a Court may find that contributions are not equal include situations where:
- There has been a short relationship and there are no children;
- One party has brought significantly more assets to the relationship than the other;
- One party has made a large contribution due to a windfall, such as an inheritance or a gift;
- One party has brought skills or talents which have enabled them to acquire significant wealth during the relationship, or
- Where one party has deliberately and or recklessly behaved in such as way as to cause a loss to the parties.
Step 3: Future needs of the parties
In this step, the Court has to look forward, taking into consideration numerous factors including:
- Age and health of both parties;
- Each parties’ income, property and financial resources as well as the capacity to earn income and if this has been altered by the marriage;
- If either party has primary care of any child or children of the marriage under 18 years;
- If either party has the care and responsibility for any one else, e.g. a parent;
- Whether either party is eligible for a pension or superannuation;
- Each party having a reasonable standard of living in the circumstances; and
- If either party is living with someone else, that person’s financial contributions.
Step 4: What is just and equitable
After having regard to the above factors, the Court will determine whether there should be an adjustment of property in favour of one of the parties to compensate for any imbalance. In doing so, the Court will consider what is the effect of any adjustment, and what is fair and equitable in the circumstances.
The effect of Agreements entered into before the relationship breaks down ("Pre-Nuptial Agreement")
It is possible to have a Binding Financial Agreement in place between the parties entered into prior to/or during a de facto relationship or marriage. This can help to alleviate many property disputes in the event of a relationship breakdown and can be particularly appealing to parties who have already been through a marriage or other relationship breakdown.
Helpful information to bring to your appointment
The following is a basic checklist of some information which, if you have it available, you should bring with you to your appointment with Commins Hendriks, as it will be helpful in preparing your case:
- Your marriage certificate;
- The names and dates of birth of your spouse, and any children;
- Copies of Title deeds or Rates Notices of any real estate you or your spouse may own;
- Market valuations of your home and any other real estate;
- A list of any valuable personal property you or your spouse may own, such as jewelry, cars, electronic equipment etc.;
- The name of your spouse's legal representative;
- A list of any bank accounts, shares, stocks or investments that you or your spouse may own;
- A list of any debts, mortgages, credit cards debts, personal loans you and your spouse may have;
- A list of monthly expenses;
- Copies of your and your spouse's tax returns for the last three years;
- Copies of any superannuation documents;
- Copies of any life insurance policies that cover either yourself or your spouse;
- If either of you have been divorced before, copies of your divorce papers;
- If either of you own a business, copies of the tax returns and financial statements for the business for the last three years.
If you do not have all the relevant information, it can be obtained during the course of your matter.
Finalising property settlements by consent
There are two options to finalise a property settlement by consent. The first is by the parties entering into a Binding Financial Agreement. At Commins Hendriks, we do not advise our clients to enter into these agreements; however we can provide our clients with a referral if required.
The second option is Consent Orders – this is our preferred method of finalising a property settlement. Neither party needs to actually attend Court; however the parties are required to complete an Application for Consent Orders, and to file this document along with the Orders being sought.
The parties are not legally required to obtain independent legal advice regarding the Consent Orders; however we recommend advice is sought prior to any agreement being finalised.
If your matter cannot be resolved by consent, either party is able to commence proceedings with the relevant Court.
Please see the Commins Hendriks Plain English Guide Family Law Disputes – Going to Court. Time limitation periods apply – please contact a representative from the Commins Hendriks Family Law team to discuss further.