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Matrimonial Property

Separation and divorce can cause significant financial and emotional stress, especially when couples go through the process of deciding how to split the property of the relationship. Here’s what you need to know.

What is property?

Once a couple has separated, it is usually necessary to divide the property of the relationship so that they can live their own lives without being tied to one another. This is known as an alteration of property interests. “Property” doesn’t just refer to real estate. It includes all the assets of the relationship. For example:

  • Money held in bank accounts
  • Shares
  • Investment properties
  • Superannuation
  • Motor vehicles
  • Chattels of value such as jewellery
  • Liabilities, such as mortgages and credit card debt.

When do property rights arise?

It’s not only married couples who have property rights. If a couple has been in a domestic partnership (also known as a de facto relationship) for two or more years, they also have property rights.

Negotiation and agreement

Sometimes, the parties can negotiate between themselves and reach an agreement about how to divide the property. If this is the case, there is no need for a court to intervene. Typically these types of agreements are reached when the relationship is shorter-term and there are no children to consider.

However, we recommend that even if you are able to reach an agreement on your own, you get legal advice before committing to ensure that all of your present and future needs are considered.

It’s a good idea to make sure that your agreement is enforceable, just in case any issues arise in the future. You will need to apply to the Family Court for an order in the terms of what you have agreed. Again, we advise that you get the assistance of a lawyer to achieve this.

If the parties can’t agree on how to divide the property, it may be necessary to apply to the Family Court for an order about how the property should be divided. The Court will require evidence (documents and witnesses) from both parties so that it can consider how best to divide the property. This type of litigation can be prolonged and so it is essential to get legal advice before taking this path.

When can I apply for property orders?

The Family Law Act sets out the timing of applications for property orders. The time limits vary depending on the circumstances:

De Facto Couples / Domestic Partnerships

De facto couples are subject to a 2 year limitation in which to file property settlement proceedings, with the 2 year time limit commencing from the date of separation.  For more information on domestic partnerships/de facto couples read here.

Still Married

On the other hand, as long as married couples “stay married” (do not file for divorce), there is no time limit restricting their ability to commence property settlement proceedings. It is not unheard of for one party to institute property settlement proceedings after ten years. This is the reason it is important that the parties formally sever their financial relationship. By obtaining Sealed Property Orders through the Court, each party can move on with their life with financial certainty.

Divorced Couples

Once a married couple officially divorce, the parties are subject to a 12 month limitation in which to file Property Settlement Proceedings. It should be noted however, it is possible to seek an extension of time is one party has reasonable grounds to excuse their tardiness in applying to the Court for property settlement Orders. Reasonable grounds may include, that the application has a real chance of success and the applicant will suffer undue hardship if the Court refuses to make the Orders sought.

What will the Court decide?

The Family Court will consider a range of things when deciding whether to make a property order. They include:

  • The assets and liabilities of the parties.
  • The financial contributions of both parties.
  • The non-financial contributions made by both parties (for example, caring for children and housework).
  • Whether either party has the care or control of a child.
  • The age and health of both parties.
  • The income, property and financial resources of each party.

It is a careful balancing process and it can be complicated, especially if the asset pool is large and diverse.

The court will assess the pool of property and its value at the date of the property settlement (the date that it gives its orders). This can be years or months after separation. This is an important point because it means that any assets that either party may have acquired after separation can be included in the pool. To put it another way, if you’ve acquired assets after separation, your ex-spouse may be able to claim a share of them. This means that it’s important that you proceed carefully before acquiring any assets before final orders are made.

Pets

If there are any pets, it is important to understand that Australian family law considers them to be property. That means that the court won’t make decisions about visitation, custody and financial support for pets.

The law views a pet as an item of property to be included in the asset pool, similar to a piece of jewellery, a share portfolio or furniture. For further information about pets and family law, click here.

Do I need a lawyer?

While parties can represent themselves in property settlements, it is our experience that involving a lawyer from the outset will assist in reducing the emotional impact of the process and provide a smoother process for communication and negotiation.

Websters Lawyers has an outstanding team of family lawyers who can assist you with your family dispute. Contact us today for a free first consultation to find out how we can help you.

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