Separation can be emotionally draining, particularly when there are children involved. As a result, couples are naturally concerned about the legal process and the impact of the separation, both emotionally and financially.
Property settlement is an integral part of the separation process. While it can be complicated, it does not necessarily require escalation to court proceedings. The team at Savannah Legal can assist you in negotiating a property settlement out of court, saving you time, money, and the stress of court proceedings.
What Is Property Settlement?
A property settlement is an agreement made between parties in a relationship to divide financial assets and liabilities at the time of separation.
Property can be defined as anything of value, including;
- Real estate assets
- Business interests
- Jewellery and valuables
- Any assets or property acquired through inheritance
Property settlement also involves dividing liabilities such as:
- Stamp Duty
What determines property settlement?
The Family Law Act determines how married and de facto couples can finalise their property settlement.
The property settlement process generally follows four steps to determine the property entitlements of each party.
- Identify all Property
Each party must provide full disclosure of all property and liabilities accompanied by an estimated value. If there is contention over the value of certain assets, then it is advised that an independent valuation is obtained.
- Assessment of contributions made
Both financial and non-financial contributions to a relationship are assessed and considered in the equitable division of property. For example, purchasing a family home is a significant financial contribution. Likewise, taking years off work to raise children and ensure the family’s welfare is an essential and valuable contribution to the relationship.
- Assessment of further adjustments
There may be further considerations and adjustments made to the division of property in a relationship for certain factors such as;
- The age and care requirements of any children
- The health status of each party
- The age of each party
- Whether the relationship has impacted either party’s ability to earn an income and secure superannuation
- The settlement must be deemed just and equitable
After assessing all the factors involved in the separation, the parties must ensure that the property division is fair and equitable. Once the settlement is agreed upon, the process of dividing and transferring property can commence, and the settlement can be finalised.
Why is it important?
Property settlement is important for any married or de facto couple. A legally binding settlement avoids future conflicts and provides certainty for parties moving forward. In addition, a property settlement allows for a fair and equitable distribution of assets and enables a couple to sever financial ties cleanly and amicably.
When Do You Need Property Settlement? Is It Necessary For Court Proceedings?
All married or de facto couples with entwined financial circumstances and assets should seek a legal property settlement. Although couples can privately arrange the division of assets and care of children, it is essential to remember that these agreements are not legally binding and leave the parties vulnerable to a future change of circumstances.
Seeking legal advice and guidance during the property settlement process is essential. Family law encourages settlement out of court through a pre-action procedure.
What Is The Pre-action Procedure In Family Law?
Pre-action procedures encourage parties to reach an agreement before making an application to the courts. In addition, the procedures provide a means to manage any contention and promote early and clear communication of information between the couple. Compliance with the pre-action procedures is required before a court application for a hearing.
What are pre action procedures?
Pre-action procedures encourage full disclosure between parties and avoid court intervention. Approximately only 5 % of separation disputes proceed to a court hearing. If the parties have complied with the pre-action procedures, it reduces the time and costs of the court intervention.
Pre-action procedures involve:
Participation in family dispute resolution – this could involve facilitated mediation or negotiation.
Communication of each parties position – each party must outline their issues and offer a genuine suggestion for resolution. This communication must contain a time period (at least 14 days after the date of the letter) in which the other party must respond.
Response to communication – the other party must now respond either accepting the suggested settlement resolution or outlining their rejection of the offer. If the party rejects the proposal of the resolution, they must provide a counter offer and specify a time period (at least 14 days after the date of the letter) in which to reply.
Exchange of documentation on financial position – if the communication process fails to result in resolution and there is an intention to file an application for the property and financial orders through the court, both parties must exchange all financial documents outlining assets, income, and liabilities.
How Do You Undergo Property Settlement?
You should seek the guidance of an experienced family lawyer as soon as possible to help you navigate the property settlement agreement process and ensure that you receive a fair and equitable share of the property.
How Long After Separation Can You Claim Property?
It is recommended that you start the property settlement process as soon as possible. The settlement procedure can take time, so it is advised to start before you apply for divorce. Once your divorce is finalised, there is a time limit of 12 months to apply to the court for property orders. Negotiation and resolution may be lengthy, so it is best to start the process early. If you were involved in a de facto relationship, the time limit to claim property is two years from the date of separation.
How Are Assets Divided In A Divorce?
Many factors are considered when dividing assets in a divorce settlement in Australia. Although divorce settlement calculators are available in Australia, there is no scientific formula. Each case is unique, and the specific circumstances of the matter will determine the division of assets. A professional property or family lawyer is best to advise you on the division of assets in your relationship.
How Long Does Settlement Take?
With professional legal guidance, settlement dates can be reached in a matter of weeks if both parties agree with the conditions. However, if a dispute and pre-action procedures are required, the case may take several months to finalise. The financial settlement may take years to complete if an application for property or financial orders is filed with the courts.
Who Can Help You With The Process?
Experienced family or property settlement lawyers can assist you in negotiation and mediation proceedings. They will ensure you comply with all pre-action procedures and can represent you in court if you fail to reach a resolution.
Property settlement after separation can be resolved without court intervention. Professional legal guidance can help you avoid separation stress and emotional exhaustion and ensure you receive the financial security you deserve.