Separating from your partner and worried how the marriage separation process will affect your financial future? Whether you were the main breadwinner or took a few years off work to raise the kids you have rights to a fair property settlement. Here’s what you need to know about divorce settlements in Australia.
How are assets divided in a divorce in Australia
Firstly, let’s define what constitutes property. Property doesn’t just include the home you share with your ex, it includes all assets and debts owned by both parties, no matter whose name the property is under.
What am I entitled to in a separation?
The following assets are examined in a property settlement and divided between both parties either through mutual agreement, or decided upon by the divorce court if the two parties can’t agree. Yes, even your partner’s superannuation may be divided up and shared with you.
- Bank accounts
- Family trusts
- Mortgage, loans, credit card and personal debts
- Insurance policies
Wondering what happens to your joint mortgage during the marriage separation process? There are a few options you can consider depending on your situation, which you can learn more about here: What Are Your Options For Splitting A Mortgage In A Divorce?
What is the settlement process?
Each divorce is different and requires a customised approach. Therefore it’s recommended to begin the settlement process by seeking legal advice as soon as possible to find out what your entitlements are.
Most property settlements are settled out of family court. However, if you and your ex-partner are unable to reach a divorce settlement agreement amicably, you might have to undergo a court ordered property settlement.
What are the five basic steps in the settlement process?
The marriage separation process can be complicated and lengthy, especially when there are many assets to divide up. The best way to know how your property should be divided between you and your ex husband or wife is by seeking legal advice. Engaging a lawyer doesn’t automatically mean you have to go through the divorce court to complete property settlements. If you do end up in family court however, the court will make a well-considered decision based on fairness and individual circumstances through a family court list of steps.
STEP 1: Evaluate combined finances:
What your assets and debts are worth when added together?
STEP 2: Evaluate direct financial contributions:
Income earned by each party.
STEP 3: Evaluate indirect financial contributions:
Whether either party contributed any inheritances or gifts during the relationship.
STEP 4: Evaluate non-financial contributions:
Whether either party sacrificed work or career growth to care for children.
STEP 5: Evaluate future requirements:
What is the age, health status, financial resources, caring responsibilities and capacity to earn of both parties.
How long does the settlement process take?
Property settlements can take anywhere between 2 weeks to 3 years to be finalised, depending on whether both parties are amicable and there are no disagreements to the terms of the separation agreement.
A property settlement can be finalised in two ways:
A consent order is a written agreement that has been approved by the court, meaning the divorce court is satisfied that the divorce settlement is fair for both parties. Consent orders are necessary when a marriage separation is amicable.
A financial agreement is a binding document usually overseen by a lawyer. Unlike a consent order a financial agreement does not require approval from the divorce court.
Property settlements have strict time limits and are best legally finalised as soon as possible. Imagine winning the lottery after separation but before your divorce settlement has begun, your ex partner could be granted half of your winnings by the divorce court. Therefore the first step towards legal separation in Australia should be to seek legal advice.
Who can help you with the Property settlement process?
When you begin the marriage separation process it can feel heavy, confusing and overwhelming. How will my children feel? What am I entitled to in a separation? Can my ex-wife claim money after divorce in Australia? The future holds a lot of unknowns right now, but all you have to do is focus on one step at a time.
Savannah legal offers a free 1 hour consultation where we discuss your individual situation and need to determine a customised plan forward. The first step to a simple separation starts with knowing what comes next.