Property Settlement After Separation
Following a separation, there will often be issues to work out concerning the property settlement.
The term “Property” refers to the family home, any investment properties, shares, cars, furnishings and superannuation. Regardless of whether these things were owned outright, or you were still paying them off, they all form part of a property settlement after you separate and need to be divided. Usually, all of the assets and liabilities of the parties will be considered together and this is what is referred to as the “property pool.” Regardless of whose name the assets or liabilities are in, they may still be considered to be part of the “property pool” for Family Law property settlement purposes.
There are three main ways to determine a property settlement (or divide your assets) and the path you take will depend on whether you are able to negotiate an agreement with the help of a lawyer.
The options available are:
1. By informal agreement between the two of you
2. By formal agreement i.e. Consent Orders or a Binding Financial Agreement
3. By Order of the Court
An Informal Agreement is exactly that – a decision that you and your former partner make by yourselves regarding how you will divide the property of your relationship. A number of couples try this approach if they feel that the separation may be temporary, and some think it will save them the costs of legal fees.
It must be said however, that the best option is to speak to a lawyer before dividing the property. Decisions made early on can often have implications in the future and it usually pays to take a more formal approach. It is important to understand that a failure to formalise your settlement can put you at risk of your former partner bringing a claim against you for property settlement, despite the fact that this may have been done informally. Formalising your settlement can also have cost benefits such as exemptions from stamp duty if assets are being transferred from one party to another.
A formal agreement is binding on both parties. This means, that when an agreement is reached there is no confusion and future conflict can be minimised.
Binding Financial Agreements are usually prepared by a lawyer. Both parties are required to seek independent legal advice before preparing a Binding Financial Agreement to ensure their interests are protected. When an agreement is reached it is documented and signed by both sides, then exchanged in the presence of lawyers. Once the Agreement is exchanged it becomes legally binding and neither party is permitted to approach the Court for Orders concerning the Agreement.
Consent Ordersare made when couples agree on the terms of their property settlement (with legal advice from their solicitors). A document is then prepared by a solicitor, signed by both parties and filed with the Court. The Court approves the agreement, Orders are made to enforce the terms and these are sent back to the parties involved. In these cases the parties involved are not required to attend Court and it is a relatively simple process to achieve a legally binding result.
If you can’t reach an agreement with your former partner regarding a property settlement, then you will need to file an application for property settlement in the appropriate Court.
The majority of property settlements are dealt with by either the Federal Magistrates Court or the Family Court. The Court will make a decision as to how the property of the couple should be divided after a hearing before a judge or other officer of the Court. The Federal Magistrates Court handles the majority of these cases, however complex property settlement matters are dealt with by the Family Court of Australia which has different procedures and more resources to enable it to deal with these matters.
For more information on property settlement after separation, contact the Lamrocks Family Law Team now. Call 02 4731 5688 or email firstname.lastname@example.org