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Avoid these 6 Divorce Property settlement red flags

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6 Property settlement red flags you should avoid

Whether you are in the process of a divorce or ending a de facto relationship, finalising a property settlement is one of the most complex issues you will face. As such, people make many mistakes when entering into one.


The family law courts treat de facto couples in much the same way as a married couple. Regardless of your relationship status, you will want to avoid these pitfalls.

1. Not getting legal advice before a negotiation

You may not feel that you need the advice of a family lawyer when discussing property matters with your former partner. After all, if you can come to an agreement on your own, it probably seems like an unnecessary expense. However, property rights under the family law act can be a tricky area to handle.

Consider this: financial assets go beyond the cash in your bank accounts. Both parties likely have superannuation interests. Superannuation splitting laws may be relevant. If you have set up a self-managed super fund, disentangling your respective interests becomes even more complicated.


Are you able to determine what will become of the family home? You may think that if only one spouse’s name is on the title, it belongs to them. But this couldn’t be further from the truth. Neither party can be forced to leave the marital home without a court order.

To ensure your rights and interests are protected, you should always seek legal advice before a financial agreement is reached. We should point out that seeking legal advice doesn’t always mean expensive legal fees. In fact, this can be far from the truth. 

2. Not knowing the value of the asset pool

To come to a fair and reasonable agreement for both of you, you need to understand the value of the property pool you’re dealing with. That doesn’t just include adding all the property you both own. You also need to evaluate the debts and liabilities associated with the relationship to find the net asset pool.

Intangible assets also need to be considered. For example, if you own a business, does it have significant goodwill, and how will it be calculated? In this day and age, newly conceived asset types like cryptocurrencies must also be accounted for and calculating their wildly fluctuating value can be extremely difficult.


When you don’t grasp the marital asset pool’s value, it is difficult, if not impossible, to reasonably expect to recover your fair share. Getting independent legal advice from a lawyer experienced in family law and a good accountant can make this much more manageable.

3. Not understanding what assets are included

De facto relationship

Some people are under the impression that assets acquired before entering a de facto relationship or marriage are not subject to a property settlement when they are. Any assets owned by you or the other party will count towards the overall asset pool, whether you came into possession of them before or during the relationship.


It is even the case that the property you acquired after separation will be up for grabs. Only once a final divorce order is granted will new assets be beyond the scope of a property settlement. In the case of a de facto relationship, a settlement can be sought up to two years after separation if:

  • The relationship itself lasted at least two years;
  • You have children together;
  • The claimant made significant contributions to the property of the other party.

4. Not drawing up a contract properly

It is a big mistake not to have any written agreement. An oral agreement may seem more straightforward, but written agreements give you a much firmer understanding of the terms to which you agree. A written document’s benefit over an oral understanding is it provides certainty to both parties regarding what they agree to and allows you to turn it into a binding financial agreement. Without legal formalisation, any disputes that arise in the future will likely need to be resolved through court proceedings.

Once the family court steps in to hand down property orders, you may find yourself in a much less favourable position. However, with a suitable contract that satisfies the family court, you can have greater control over what you receive in the settlement.


Depending on how you handle the property settlement, a contract detailing its terms may need to adhere to strict rules regarding what information is included and what language is used. When you seek to secure consent orders, the court will apply a four-step process to ensure that the settlement is just and equitable to both parties. When the court feels your proposed property settlement fails to meet these criteria, your application for a consent order will be rejected.

5. Accepting less than what is just and equitable

Non-financial contributions

It’s not uncommon for a party to a property settlement to jeopardise their financial circumstances by agreeing to a grossly unfair property division. This can happen for several reasons, including:

  • Not receiving legal advice to properly understand your rights and whether a property settlement is in your best interests (refer to point 1);
  • Not having taken the time to accurately assess the value of the property being dealt with (refer to point 2);
  • They don’t want to have to deal with the legalities of removing themselves from a relationship, and want the whole thing to be over, and so accept the bare minimum;
  • They are unaware of assets being hidden by their former partner;
  • Not confronting their ex-spouse about asset wastage;
  • Not fully appreciating factors such as non-financial contributions to a relationship.

While we understand that going through a divorce is already an emotionally traumatic time, you will come to regret not standing up for what is rightfully yours over time. So, it is well worth investing in a family lawyer to provide legal advice to know where you stand legally and financially, so you can divide property fairly.

The issue of hiding or intentionally dissipating assets is often overlooked. Still, it can play a significant role in denying you your rightful share of the assets. It can be challenging to uncover these activities. But with the help of a forensic accountant, you can significantly increase your standing in property settlements.


6. Not thinking long-term about life after divorce

When children are involved, financial agreements can be even more complicated. Many things need to be thought about concerning the future needs of a child under the age of 18, including:

  • Education;
  • medical needs;
  • Basic living expenses;
  • Extra-curricular activities.

You need to think carefully about the long-term implications of these concerns when organising matters related to child support. You can apply for child support any time before your child turns 18. However, managing it and your property settlement at the same time is often easier. It is then necessary to consider child custody arrangements when entering a financial agreement.

Depending on your and your ex-partner’s financial resources and earning capacity, you may need to pay spousal maintenance if they’re your child’s primary carer. Your equal parental responsibility doesn’t end when you get divorced, and supporting your partner in their role as the primary caregiver will be expected.

These are some of the most common mistakes people make when approaching a property settlement, but there are many more. Creating a settlement that is fair to both sides depends on your individual circumstances, and talking to an experienced divorce lawyer, such as those at Shanahan Family Law, is essential.

Extra Property Settlement Learning Resources

Learn more about property consent orders or contact us today to organise an initial free discovery call.

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Luke Shanahan Family Law

Luke Shanahan


Luke Shanahan is the Principal Solicitor of Shanahan Family Law. Luke has been practising family law since 2008 and started his firm in 2014. He has three beautiful daughters and a supportive, gorgeous wife. In his spare time, Luke enjoys playing tennis and trips to the beach with family and friends. 

Luke is dedicated to providing the best possible legal representation for his clients. His experience and passion for family law set him apart from other solicitors. You only have to read their 5-star reviews to understand that.

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