Property and Family Law: What You Need to Know After Separation
July 2, 2020
420 viewsSeparating and dividing property can be tough. Should you divide it in half for everything or should you consider your partner’s situation?
Good morning Property and the Family Law Act: What You Need to Know After Separation I wish to return to the Family Law Act 1975 (“the Act”) and how property can be divided between parties. The Act has the ability to determine how the family property will be divided between the parties. There are time limits which need to be observed. Where there is a divorce, you have 12 months from the date of the divorce to make a property application to the court. For a de facto relationship, you have two years from the date of separation. Although the court has capacity to accept applications out of time, it will need convincing reasons for approval to be given.
What is property?
Property includes all assets and debts owned by both people, whether it is in both names, or just one person’s name and includes:- the family home;
- bank accounts;
- investments;
- businesses;
- insurance policies;
- family trusts;
- superannuation;
- inheritances;
- shares;
- jewellery
- vehicles
- debts including mortgages, loans, credit cards and personal debts
Going to court is costly, time-consuming and regretfully, often results in the loss of relationships with children. You have a stranger who makes their decision on the evidence before them without knowing the full details of the relationship which often results in a decision nobody likes. Prior to filing an application, the court requires parties to have to have made a genuine effort to resolve their matter and produce a mediation certificate. This may be excused when an application is urgent
It is important that you seek legal advice to ensure you are aware of the legislation and how courts determine the separation of property, even if you and your partner have come to an agreement. If you and your partner have come to an agreement this can be achieved by:- An informal agreement Where there is complete trust between the parties, they can agree to divide their assets as they wish, however in the event of any future dispute a signed agreement will assist in establishing the agreement. In most cases I would advise parties to proceed with either a financial agreement or by consent orders made by the court.
- Financial agreement Often referred to as a binding financial agreement, a financial agreement under the Act is a contract of agreement setting out how the parties have agreed to divide their family assets. Such agreements can be made before, during or at the end of a relationship. It does not have to be approved by a court and can be made exactly in accordance with the parties’ wishes. In accordance with the Act each party must be separately advised by their own separate lawyer as to the advantages and disadvantages of their financial agreement. A financial agreement has the benefit of a stamp duty concession when transferring real property between the parties and can be enforced by a court. Like any contract, if a party has acted fraudulently, coerced or undertaken misleading conduct, the other party may have the court vary the financial agreement.
- Consent Orders These are orders made by the court on the basis of the agreed orders of the parties. Being court orders, they are more easily enforced. They may include parenting orders if required. However, when making the orders the court must consider whether the orders are fair and reasonable in accordance with the Act. If the orders requested do not comply, the court may refuse to make them. Applications for consent orders must be filed in the Federal Circuit and Family Court of Australia, or if you are in Western Australia, the Family Court of Western Australia along with full financial disclosure of the parties.
How should property be divided?
No one can tell you exactly how your property should be divided. We recommend that that you seek legal advice as to your entitlement. If settlement cannot be reached and you have to proceed to litigation, you are required to fully disclose all your financials. The court, a stranger to your circumstances, will determine how to separate the family assets on the evidence that is presented by the parties. The court’s decision is made in accordance with the Act, on a just and equitable (or fair) basis considering the following;- the direct financial contributions by each party;
- non-financial contributions to the relationship, such as home making and caring for children;
- any future requirements – such as age, health, financial resources, caring responsibilities and capacity to earn; and
- the superannuation entitlement of the parties.
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