The collapse of a relationship resulting in separation or divorce is an emotionally draining event, so navigating the property settlement process simultaneously can complicate matters. This stress is only further compounded if you’re trying to manage the ins and outs of property settlement without a legal background.
In this blog, we’ll get you up to speed on property settlement after separation, explaining the steps to prepare you if you need to go through the divorce and property settlement process yourself. Knowing what to expect can make the process easier for you and help you get a better outcome.
How Does Property Settlement Work in Divorce?
When couples separate, there comes a time when they need to consider what happens about the division of any property they share ownership of. This is where family law property settlement comes in. This provision, which comes under the Family Law Act, is intended to help couples cut all financial ties between the parties so that no further claim can be made on the property belonging to the other person. It is an agreement that allows both parties to make a clean break and move on with their lives with certainty.
In many cases, couples can come to an agreement about property settlement with the assistance of their lawyers. In these cases, the lawyers will simply make a straightforward application for consent orders which are binding and enforceable but also come with certain tax benefits.
However, there are more complex cases where couples cannot agree about the division of property. In these instances, they must file an application for property settlement in the appropriate country. The Federal Circuit Court or Family Court deals with most of these types of applications. In most cases, property applications are settled without a decision being made by the court. However, if a settlement can’t be reached, the court will decide on how the property will be divided following a formal hearing in front of a judge.
It is important to note that more complex property settlement matters tend to be dealt with by the Family Court of Australia, which has different procedures and more resources to help parties reach an agreement.
What Happens at Property Settlement?
When an application for family law property settlement is filed in court, a 4-step process is undertaken and proceeds according to the following stages.
Stage 1: Establishing the Couple’s Net Asset Pool & Valuation of Assets
This is where a record of all assets is considered, regardless of whether they were acquired before, during or after the separation. The property covers value, including real estate, shares, cars, jewellery, savings, and furniture.
Stage 2: Taking Account of Each Party’s Contributions Towards the Net Asset Pool
The next step is where each party’s contributions towards the marriage or de facto relationship, both financial and non-financial, are calculated. There is also some evaluation conducted to ascertain the contributions made to those who function as homemakers or parents. Moreover, other initial donations are also brought into the mix, including gifts, inheritances and money received during the relationship.
Stage 3: Assessing Future Needs & Adjustments
Then it is time to evaluate the future needs of each party. This considers a whole host of factors such as age, health, income earning capacity, properties, care and support of any children, and the financial circumstances of any new relationships. At this stage, the court also considers any adjustments that need to be made for the parties' future needs.
Stage 4: Practical Effect
The final stage in this 4-step process is when the court considers the practical effect of the proposed property settlement and ensures that it can be implemented equitably.
Both parties in the relationship must fully and honestly disclose their respective financial circumstances. Failure to make such can have serious legal consequences.
At the end of the day, whether the agreement can be reached, the rules governing the division of assets are complex. Therefore, anyone going through a divorce or separation should always seek professional legal advice before making any final decisions.
What Can You Do to Prepare for Divorce & Property Settlement?
Organising property settlement in the event of a relationship breakdown can be challenging. However, there are a few things you can do to prepare yourself for the process and improve your chances of seeing a positive outcome.
Ensure You Have Access to & Security Over Your Finances
Whether you think you can end things on amicable terms, preparing for the worst-case scenario is best. Start by breaking any joint accounts as soon as you feel the relationship is over. Similarly, as stressful as a breakup may be, you should consider the long term, including where you want to live. You should call your bank and let them know about the situation. The bank should tell you about the requirements, such as joint signatures needed for withdrawals. Be mindful that if you have your partner as an additional cardholder on your credit card account, you will be liable for any debt they incur. You should also stop or limit online access to shared accounts during this period.
Get Your Important Documents in Order
Having all your essential documents ready makes the property settlement process more straightforward and relieves stress. Organise your most recent payslips and tax returns, along with the bank, credit card and mortgage statements; vehicle registration statements and any other documents relating to the ownership of shared assets and liabilities. People often find these documents hard to get hold of at a moment’s notice, so plan. These documents will make the process go more smoothly and help your lawyer build a strong case for you.
Keep a Record of Significant Facts About Your Relationship
This may be easier said than done, especially if the relationship broke down very suddenly. But try to make notes on any important dates, events, and facts about your relationship. Creating a clear timeline of events can be extremely helpful for your lawyer. Start with the basics, such as when you moved in together, married, purchased property, and had children. Try to make a detailed record of both financial and non-financial contributions you’ve made towards the everyday logistics of the relationship and running of the household. All this information will help the court assess the property settlement case accurately.
Get Legal Support As Soon As Possible
Finally, remember that even in the best cases, there is only so much you can do yourself in a property settlement case. Going through a divorce is highly disruptive, and you should seek expert support in legal matters. Find a specialist family law firm with a successful history for property settlement cases. The lawyer you choose will guide you in making the best decisions that will serve your interests in the long term. Seeking legal support as soon as possible will also protect you from making mistakes in the property settlement process and ensure this process is as painless as possible. Your lawyer will also ensure that all the information presented to the court is done so accurately and nothing is deemed to be falsified because misinformation is considered a criminal offence and can lead to severe penalties.
Taking the First Steps on Your Property Settlement After Separation Journey
In short, property settlement cases can be complicated, and dealing with the bureaucracy during an emotionally painful period can be highly stressful. Therefore, we recommend having a lawyer you have trust and confidence in.
Duffy & Simon lawyers are here to help if you are looking for expert legal support. Duffy & Simon's lawyers have in-depth knowledge of family law, including property settlement agreements. They understand what it takes to ensure the settlement is fair and equitable. From identifying what is included in the joint property pool to negotiating with the other party and formalising agreements to achieve legally accepted results in court, they will ensure all your matters are provided with a smooth property settlement case.
Do right by yourself and your future; contact Duffy & Simon to discuss their property settlement services, available for Pakenham and the surrounding areas. Call them on 1300 537 345 today.
