Why do you need a property settlement?

One of the most important aspects to a relationship breakdown is dividing your property. This is done through a ‘property settlement’. The dividing of both your matrimonial assets and liabilities (whether joint or sole) must be done in a fair and equitable manner. 

Family law recognises that couples accumulate their wealth together, despite some things being in one person’s name. It also recognises that while one person may have made greater financial contributions, the other person may have made greater non-financial contributions (such as being a homemaker and primary carer). These contributions are viewed by the Court to be equal and will influence the split of property 

Sometimes people who have amicable separations do not wish to start any legal processes. We understand that it is a difficult and emotional process to divide the matrimonial assets, however, prolonging this can only make things worse in the future. 

Even if you have moved out of the family home, your finances will remain entwined until you formally document a property settlement. This means that any income, profits, inheritances as well as liabilities you gain after separation, will continue to affect each other. 

Any property that is owned together leaves you at risk in the following ways: 

  • Decisions may need to be made jointly; 
  • One of you may take an action that the other may not agree with; 
  • If you decide to sell the property, you need to decide how to divide the proceeds; and 
  • You would be responsible for paying any mortgages or liabilities (even if one of you cannot pay the mortgage or incurred the liability). 

Similar difficulties also apply to your savings, superannuation, and any other valuable assets. 

There are many considerations when seeking to enter a formal property settlement and there are a variety of ways to do this, we have more information here. 

If you require assistance documenting your property settlement or need advice on your family law matter, please contact us on 1300 654 590 or email us.

When can you enter a property settlement? 

You can enter a property settlement any time after you have separated and consider the relationship has irretrievably broken down. However, if you have already obtained a divorce order from the Court, there is a strict time limit of 12 months from the date of the divorce or if you were in a de facto relationship, 2 years from the date of separation. If you seek to apply after this period, you will need to demonstrate to the Court that it would cause significant hardship if the Court were not to waive the limitation period. The Court considers this on a case-by-case basis and has power to reject your application. 

Benefits to Entering a Property Settlement 

There are many reasons you should take steps to enter a formal property settlement with your previous partner. Firstly, it will provide certainty and peace of mind moving forward knowing that joint property have been properly separated. A formal property settlement will ensure that any liabilities your ex-partner continues to incur will remain their responsibility. It will also avoid any claims in the future against any wealth you may begin to accrue. If you were to win the lottery or receive a significant inheritance after separation and you have not entered any formal property settlement, this could be considered part of the joint assets in and future claim for property settlement. Also, if your property settlement is documented properly using either consent orders or a Binding Financial Agreement, you may be eligible for tax and stamp duty concessions on assets you have agreed to transfer under the agreement. 

Thinking further ahead, on your death, if your ex-spouse makes a family provision claim against your estate, the Court will take into consideration any orders and/or agreements made in family law proceedings. 

By entering a property settlement, you can properly move forward with your life. 

Andreyev Lawyers can help you to document your property settlement and advise you about your family law matter.  If you would like to have a preliminary chat with an experienced family lawyer, please contact us on 1300 654 590 or email us.

 

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