A property settlement occurs when a couple makes a legally binding agreement about how to split of the assets and liabilities of their relationship, or when the Court orders the split of assets and liabilities of a relationship.
There are four main steps in assessing a property settlement:
A property settlement is influenced by a wide range of factors, but these are some of the most common ones:
In most situations, it is in the best interests of both parties to finalise their property settlement by agreement. Taking a case to trial to have a Judge decide it can be a slow and expensive process. If a property settlement is not finalised in one of the three ways listed above, there is a very real risk that the other party can still apply to the Court for property settlement orders, even if the parties had agreed on a property split between themselves.
Under the Court Rules, the parties to a property settlement case are obliged to provide full and frank disclosure. If a person fails to provide full and frank disclosure they could be penalised by the Court and could be ordered to pay the other party’s costs.
An asset of a relationship is any asset owned by either member of the relationship whether jointly, individually or with any other person in Australia or overseas. Even if an asset was owned by one of the parties before the start of the relationship, it will still be considered an asset of the relationship. Common types of assets include: property, motor vehicles, bank accounts, businesses, companies, trusts and superannuation.
A Financial Resource includes an interest in any entity, property or trust, where the party does not actually own that asset so it cannot be viewed as an asset of the relationship. Financial Resources need to be declared through the disclosure process.
A liability of a relationship is generally any debt owed by either person in the relationship, whether jointly or individually, or with any other person. This could also include a liability resulting from dealings with a company or a trust. Relevant liabilities generally include debts incurred at the start of the relationship, during the relationship and after the end of the relationship.
Slightly different time limits for property settlement apply to married couples and de facto couples.
A party to a marriage can apply to the Court for a property settlement any time between the day of separation and the day one year after the parties are divorced. This means that if you have been divorced or are in the process of getting a divorce but have not finalised your property settlement, we recommend that you speak with a Family Lawyer to discuss making arrangements for a property settlement as soon as possible.
A de facto partner can apply to the Court for a property settlement any time between the day of separation and the day two years after separation.
If you are out of time to apply to the Court for a property settlement (i.e. if you were married and it is over one year since your divorce, or if you were in a de facto relationship and it is over two years since separation), you will need to get permission from the Court before you can apply for a property settlement. Whether the Court will give you permission is highly dependent on the specifics of your case – if you are in this position, we recommend speaking with a Family Lawyer as soon as possible to find out your options.