During a relationship, most parties make financial and non-financial contributions towards building or maintaining assets, and generally looking after the family unit. Joint bank accounts are opened, property may be purchased, and financial resources shared. When a relationship breaks down, it is understandable that most people will be concerned about how their accumulated assets will be divided in a fair and consistent manner.
What is a Property Settlement?
A property settlement is an arrangement that sets out the legal division of assets between couples following a separation or divorce.
An asset is any tangible or intangible property of the relationship held jointly or in either name that is considered to have value, less any liabilities and debts. These assets form part of a ‘pool’ and can be subject to a property split. Typical assets include:
- the matrimonial home
- investment properties or holiday homes
- superannuation accounts
- cash in the bank
- shares or investments in businesses or companies
- vehicles and boats
- furniture, artwork, and collectables
Using Mediation for your Property Settlement
In many cases, separated couples can settle property matters and reach agreement about the division of assets with the help of a family lawyer, without going to court.
We are committed to helping you settle property matters quickly and effectively by using alternative dispute resolution processes such as mediation.
We can act as an independent third party to assist you and your partner to have confidential settlement negotiations and guide you towards a mutually acceptable resolution of your matter.
Once an agreement is reached, formal Consent Orders can be made to ensure the agreement is legally binding and enforceable.
What are Consent Orders?
Consent Orders are formal binding orders regarding the division of assets and liabilities between a separating couple. They are made following a negotiated outcome between the parties and must be approved by the court. Consent Orders may cover a range of matters including:
- the transfer of property from one party to the other;
- the payment of funds in exchange for the transfer of property;
- the sale of real estate or other property including terms regarding the appointment of an estate agent, method of valuation and distribution of surplus funds;
- the splitting of superannuation;
- requirements for paying out loans and credit cards and closing bank accounts;
- financial maintenance of one spouse by the other.
When can I finalise a Property Settlement?
You do not need to be divorced before finalising your property settlement. However, applications for property settlement must be made within twelve months of a divorce becoming final and within two years of a de facto relationship breaking down.
Why should you finalise your Family Law Property matter?
Most people are anxious to formalise their financial affairs after a relationship ends, but for some, sorting out property and dividing assets is the last thing they want to face. Even if you are on good terms with your ex-partner, or the asset pool is quite small, it’s important to legally finalise your property affairs so that you can both move on with your separate financial lives. A legally recognised property settlement addresses the following important matters.
- Stamp duty concessions – the transfer of certain property such as real estate, is generally liable to stamp duty. However, exemptions or concessions from duty generally apply for transactions that are documented in a complying financial agreement or consent orders.
- Taxation implications – understanding any adverse tax implications of a proposed property settlement and structuring the settlement to address these can have a significant impact on the net result for both parties. A family lawyer can flag potential tax implications like Capital Gains Tax and may recommend working with an accountant to ensure a property settlement delivers the most viable results and avoids, where possible, triggering unexpected tax liabilities.
- Claims on post-separation assets – an informal property settlement is not generally recognised as bringing a couples’ financial affairs to a legal end. This can leave parties unprotected from potential issues such as a subsequent claim on post-separation assets, income, and inheritances.
Urgent matters – interim orders and injunctions
If you are unable to resolve certain urgent matters, you may need to apply to the court for interim orders. These are temporary orders, usually made in urgent circumstances to determine parenting or financial matters until a final hearing.
In a financial context, interim orders may be sought as an ‘advance’ on what a party is likely to receive in a final property settlement. Interim property orders can provide much-needed property or funds while waiting for a settlement. If granted, these funds are taken into account in the final settlement and deducted accordingly.
Occasionally, an injunction may be sought to prevent a party from doing something or to compel them to do a certain thing. For example, in contentious matters, a party may refuse to leave the matrimonial home or threaten to dispose of certain property forming part of the asset pool. In such cases an injunction may be ordered to prevent a person from entering the home or to stop a person from dealing with the property.
We strongly encourage separated parties to resolve their property disputes without resorting to court proceedings. Despite best intentions however, it may be impossible for you to reach an agreement and going to court may be in the only viable option. In such cases our accredited specialist family lawyers will guide you through the process and advocate strongly on your behalf.
Whether your matter is simple or complex, or your asset pool modest or significant, it is essential that you obtain independent legal advice when dividing your property. Our accredited specialist family lawyer will explain your rights and assist you to achieve a fair division of property, allowing you to move on with your life.
If you need any assistance, contact one of our North Sydney family lawyers at [email protected] or call 02 8075 0141 for a no-obligation discussion and for expert family law advice.