Property settlements are a vital part of divorce and separation. It is important you understand how property settlements are handled in Australia to ensure you receive your true entitlements. One complication many face is not knowing what time limits apply and what property will be divided.
In this article, we’ll look into the details of what property is divided, how the division process works, and when you can apply for a property settlement after separation. This knowledge will help you navigate the process more confidently and effectively.
- You can divide property through a financial agreement or a consent order.
- Financial agreements are flexible but require parties to seek independent legal advice.
- The Family Court assesses property consent orders through a 4-step process.
- Property owned by the parties when a settlement is made is eligible for division. Even property obtained after divorce may be affected.
- Under special circumstances, you may apply for a property settlement after the allotted time limit.
How is property division in Australia?
Couples may enter into a financial agreement without needing to involve the Court. For an agreement to be valid, specific criteria must be met. Both parties must receive independent legal advice from a family lawyer. The lawyer will walk them through how a proposed agreement affects their interests.
Once the parties have received legal counsel, the lawyer will provide a certificate of independent legal advice. This certificate indicates that the parties have satisfied the requirements to bind an agreement legally.
A financial agreement offers more flexibility than consent orders. This is because they don’t need to satisfy the Court’s requirement for a ‘just and equitable’ outcome. However, agreements are often more expensive and complicated to organise.
Property consent orders
The Court uses a four-step process to determine the proper division of assets.
The Court will value the marital asset pool. The parties must provide full and frank disclosure of all assets and liabilities. If a party is found to be hiding other assets or deceiving the Court in any way, they may face penalties.
The Court considers the contributions of each party to the marriage. A party may make financial contributions or non-financial contributions. Non-financial contributions may include keeping the home, making renovations or child support.
The Court will determine the future needs of each party. One person may experience undue hardship after divorce for many reasons. Some factors affecting a party’s future needs may include the following:
- Age and health;
- Earning capacity;
- Access to financial resources;
- Childcare responsibilities.
In the final step, the Court decides if the proposed property settlement is ‘just and equitable’. If the settlement satisfies this requirement, the consent order is granted.
What property is eligible for division?
There is often a misunderstanding about what property is subject to division. The Court considers property brought into the marriage part of the marital pool. Any property acquired during separation is also eligible for consideration in a settlement.
You may believe a divorce’s finalisation marks the cutoff when defining a marital pool. However, the Court will consider all property the parties own when they apply for a settlement. Since a married couple may apply for a settlement up to a year after the divorce, property obtained during that period is potentially available for division.
Property settlement after separation or divorce time limits
No law regulates how early a couple can organise a property settlement. You can form a financial agreement before, during or after a divorce. You can even agree on establishing any relationship at all.
However, you cannot wait an arbitrary amount of time after a divorce or relationship break. According to the Family Law Act 1975, you must finalise a property settlement by one year after completing a divorce or two years after ending a de facto relationship.
Applying after the time limit
If the time limit elapses before you agree to a settlement, you may still be able to apply. However, you’ll need permission from the Court. To be successful, you must prove the following:
- You have a significant case for a property settlement;
- You or a child of the marriage will experience hardship without a property settlement;
- You have an adequate reason for not applying within the allotted time.
Work with us
It’s important to understand how property is handled in a divorce. You may lose your entitlement if you don’t approach a settlement correctly. Knowing when to apply and what property is involved will strengthen your position. Shanahan Family Law has years of experience offering property settlement services. For further advice, contact our team to set up an initial free discovery call so we can help you protect your rights.