Why Delaying a Matrimonial Property Settlement is Not Advisable

When a relationship ends, one of the most important steps to take is resolving the division of property and assets. However, many individuals hesitate to proceed with a matrimonial property settlement, often due to emotional, financial, or logistical concerns. While this hesitation is understandable, delaying a property settlement can lead to significant risks and complications. Below, we outline the key reasons why it is not advisable to delay this process.

Risk of Asset Dissipation

One of the most pressing concerns in delaying a property settlement is the risk that assets may be wasted or diminished by the other party. For example:

• Spending or Disposal of Assets: The other party may sell, transfer, or spend joint assets without your consent.
• Deterioration of Assets: Certain assets, such as vehicles or properties, may lose value over time if not properly maintained.
• Financial Mismanagement: Delays may allow one party to accumulate debts or liabilities that could impact the overall pool of assets.

The Family Law Act 1975 (Cth) provides mechanisms to address these issues, but prevention is always better than seeking remedies after the fact.

Impact of Subsequent Inheritances or Financial Advancements

Delaying a property settlement can expose you to claims over future financial gains, such as:

• Inheritances: If you receive an inheritance before finalising the property settlement, it may be included in the asset pool for division. In some circumstances, should either party be receiving an inheritance in the not too distant future, the Court can take this into consideration in the division of the property pool.
• Career Advancements: Promotions, salary increases, or business growth achieved after separation could be considered when determining the financial contributions of each party.
• Windfalls: Unexpected financial gains, such as lottery winnings, may also become subject to division.

By finalising the property settlement promptly, you can protect your future financial position from being unnecessarily entangled in the division process.

Superannuation Growth

Superannuation is treated as property under Australian family law and forms part of the divisible asset pool. Delaying a settlement allows superannuation balances to continue accruing, which may disproportionately benefit one party over the other. For example:

• If one party has a significantly higher superannuation balance, the delay may increase their entitlement at the expense of the other party.
• The longer the delay, the more complex it becomes to calculate and divide superannuation entitlements fairly.

Estate Planning and Protecting Your Legacy

Finalising a property settlement ensures that your estate is in order and protected. Without a settlement:

• Your former partner may still have claims against your estate if you pass away before the property division is resolved.
• This can create complications for your beneficiaries and loved ones, potentially leading to costly and lengthy legal disputes.

By resolving property matters promptly, you can safeguard your estate and ensure your wishes are respected.

Emotional and Financial Certainty

Prolonging a property settlement can lead to ongoing stress and uncertainty for both parties. Finalising the settlement provides:

• Emotional Closure: It allows both parties to move forward with their lives without the lingering burden of unresolved financial matters.
• Financial Stability: It ensures that each party has clarity regarding their financial position and can plan for the future accordingly.

Legal Time Limits

It is important to note that there are strict time limits for initiating property settlement proceedings under the Family Law Act 1975 (Cth):

• For married couples: Applications must be made within 12 months of the divorce becoming final.
• For de facto couples: Applications must be made within two years of separation.

Failing to act within these timeframes may require you to seek special permission from the court, which is not guaranteed and can add further complexity and cost to the process.

Conclusion

Delaying a matrimonial property settlement can have far-reaching consequences, including financial loss, legal complications, and emotional strain. By addressing property matters promptly, you can protect your assets, secure your future, and achieve peace of mind.

If you are considering a property settlement but are unsure about taking the next steps, we encourage you to seek professional legal advice tailored to your circumstances. Acting sooner rather than later can make all the difference in achieving a fair and efficient resolution.