Property settlements can be confusing, particularly when buying property while separated in Australia before the settlement is finalised. Let’s look at what the law has to say in these circumstances.
Key takeaways
- Property pools are identified and valued at the time of settlement.
- The timing of a settlement can affect value when dividing property.
- Post-separation assets can affect the assessment of contributions.
- Existing financial agreements may be overturned in some situations.
- One partner can challenge a financial agreement due to changed circumstances.
Family law when buying property while separated in Australia
Separating couples often need clarification around what assets are eligible for division. A common misconception is that property acquired once the couple is no longer together is protected. However, this isn’t true.
The Federal Circuit and Family Court considers all the property owned at the time of the settlement. This is set out in the Family Law Act. The property pool is identified and valued when the property settlement process takes place. Asset values can change significantly over time. For example:
- Bank accounts go up or down.
- Superannuation increases.
- Personal debts accrue.
- The property market fluctuates.
When can you settle property matters? Property settlement time limits depend on whether the couple was married or in a de facto relationship. Divorcing couples must make property arrangements within one year of their divorce order. De facto couples have two years from the date of their separation.
Separation isn’t completely irrelevant. While it doesn’t protect property from inclusion in the asset pool, a change in relationship status can influence a court order.
Contributions to property acquired after a separation
The court gives careful consideration to your and your former partner’s non-financial and financial contributions to the marital property. An ex-partner’s contributions to assets purchased after separation may be reduced.
For example, a spouse may have contributed to their partner’s business during the marriage. These contributions may cease after the separation. If business proceeds funded an asset after separating, their non-financial contributions will have less claim on the property.
What if you have an existing financial agreement?
Couples can make a property settlement agreement during their relationship with independent legal advice. Financial agreements must account for future financial resources. Couples don’t stop financial development. How can this impact an agreement? Agreements can be overturned when considering new property or changed financial matters.
Changed circumstances with your ex-partner
You can show a significant change in your circumstances that makes the written agreement too burdensome. With independent advice, your family lawyer can appeal to the Court for consent orders to meet your future needs. This can trigger a reassessment of property and income acquired after the relationship ends.
Length of the separation
Couples can disentangle their finances more over the course of a long separation. There’s no maximum limit on the separation period. Couples can wait as long as ten years before finalising a divorce. During this time, you might buy a new house with a conveyancing lawyer. Increasingly independent finances and domestic arrangements will make the new home less of a product of the marriage.
From our clients
I had a great experience with Shanahan Family Law. The team was professional, responsive, and compassionate throughout the entire process. I felt supported and well informed at every stage. Thank you for your guidance and excellent service.
- Danielle Mair
We protect your legal rights to marital assets. We can secure spousal maintenance and the division of other assets. Your case may involve nuanced circumstances. We will provide you with experienced advice to protect your future.
Conclusion
There’s often confusion about how property purchased after a separation is handled in a divorce settlement. Understanding how the court approaches assets will help you achieve a property division that suits your needs.
Good people with good processes. Fair and good to deal with. Thank you Ritchie, Luke and the team.
- Georgia and Ryan
Are you seeking legal advice for family law matters? Contact us for assistance.
