Why Are Property Settlement Lawyers Required?
A property settlement is the process of severing a married or de facto couple’s financial relationship through the division or allocation of property, liabilities and financial resources. This happens when, in consideration of all the circumstances, the Family Court is satisfied that it is just and equitable to do so.
Parties may reach a property settlement agreement without court proceedings. This can be achieved through negotiation, mediation or other alternative dispute resolution processes, which may be formalised through an application for consent orders or a binding financial agreement. However, if such alternative dispute resolutions are unsuccessful, then a party may have to commence proceedings seeking property settlement orders, provided that such an application is brought within the limitations period.
What Is A De Facto Relationship?
A de facto relationship is constituted when two persons, not legally married to each other and not related by family, have a relationship as a couple living together on a genuine domestic basis.
In order to determine the nature of the relationship for the purpose of a financial or property settlement, the Family Court must be satisfied as to a number of factors, including:
The parties were in a genuine de facto relationship that has broken down.
The relationship lasted at least two years, or there is a child resulting from the relationship.
What Is The General Rule Surrounding The Division Of Property Between De Facto Partners?
In the event of a de facto relationship breaking down, the Court will consider the following factors in the distribution of any property owned by the parties:
The property held by the parties at the commencement of the relationship.
The length of the relationship.
The financial and non-financial contributions made by the parties.
Any indirect financial contributions made.
The asset pool as of the date of separation.
The future needs of the parties.
If there was a pre-existing binding financial agreement in place.
What Do Property Settlement Lawyers Organize for You?
STEP 1
The first step is to identify the assets, liabilities and financial resources of the parties to the relationship and whether these items are held in the sole name of a party or jointly with each other. Sometimes, they may be held by another person or on trust. It is important to note that superannuation is treated as an asset for the purposes of property settlement proceedings and may be the subject of a superannuation splitting order. It is also important to assess if there is a pre-existing binding financial agreement between the parties.
STEP 2
There is an assessment of the financial, non-financial and welfare contributions made by the parties of the relationship as well as an assessment of the future needs of both parties.
STEP 3
The final step is an assessment of the proposed division of assets and liabilities to ensure a just and equitable alteration of the property interests of both parties.
Final property orders will be drafted, which may include a mechanism that ensures the orders are followed correctly. An example of this would be a default sales clause or an order for interest payable. It may also include a rule that enables a court official to sign documents on behalf of a party, in the event that party fails to comply with their obligations.
Parties may also commence proceedings seeking enforcement orders by way of an application in the Federal Circuit Court or an enforcement hearing in the Family Court.
When Should You Consult A Property Settlement Lawyers?
MARRIED COUPLE
A party to a marriage may bring a property or maintenance application forward at any time following separation. This is true unless a divorce order has been granted. In this case, the parties have only 12 months from the date of the divorce becoming final in which to apply for any final or interim property or spousal maintenance order. However, proceedings may be commenced out of time with the leave of the Court.
DE FACTO COUPLE
A party to a de facto relationship has only two years from the date their relationship ends in which to bring forward a property or maintenance application. A party to a de facto relationship cannot apply under the Family Law Act if the relationship has broken down before 1 March 2009 unless both parties consent to their application being heard. If no consent is obtained, then the application will need to be made under the respective State or Territory Law.
The Court must be satisfied that it is just and equitable in all of the circumstances to alter the property interests of the parties. Ordinarily, to satisfy the Court, parties must be living in a de facto relationship for approximately two years, unless there is a child of the relationship or substantial contributions have been made during the relationship.
Unless a de facto couple registers their relationship, there is no written document as to the existence of the relationship or its commencement date. A party to a de facto relationship may seek a declaration as to the existence or non-existence of the relationship under the Family Law Act.
What Is A Binding Financial Agreement?
A financial agreement is a document executed by both parties to a relationship that deals with property settlement and spousal financial support entitlements. The Court’s approval of the agreement is generally not sought. Couples can enter into a financial agreement before marriage or the commencement of cohabitation, during the relationship or after separation or divorce.
Financial agreements entered into before marriage or cohabitation or during the relationship, will provide for the division of assets and payment of spousal maintenance in the event that
the relationship breaks down. However, there is often some concern about entering into such agreements as the means and needs of each party, at the relevant time of the separation, are unknown and not something that is easily or accurately predicted.
Accordingly, a financial agreement reached during these times could result in a property settlement that would not be considered reasonable if it was determined at the relevant time of separation.
To overcome these issues, the parties should be reviewing and entering into amended financial agreements to reflect contributions made and changes in circumstances. Such circumstances could include the birth of a child or children. This can be a costly and time-consuming exercise and generally not attended to. However, it is recommended that the parties take time to seek independent legal advice for the purpose of recovering a statement confirming that the advice has been provided–whether this be for a financial agreement or an amended financial agreement.
A financial agreement is not required to be fair, whereas a property settlement finalised with consent orders is required to be just and equitable. A financial agreement cannot be set aside on the grounds of financial hardship if the parties have no children. The freedom to negotiate a settlement should the relationship break down or be resolved by way of consent orders or Court intervention must be given proper consideration when entering into a financial agreement.
In What Circumstance Is A Financial Agreement Necessary?
There may be some circumstances where a financial agreement would be appropriate. For example, where one person may have children from a previous relationship and wishes to preserve certain assets for the benefit of their children and protect those assets from any future property settlement claim.
If the parties are entering into a financial agreement following separation, then this may operate as a release of the obligation on the part of one party for future spousal maintenance. Alternatively, it may be intended to document the agreed property settlement. As financial agreements are not required to be fair, nor are they approved by the Court, there is no affirmation as to the justice and equitability of the agreement based on the party’s means and needs at the time. In those circumstances, the parties should consider consent orders or Court intervention.
Financial agreements can be set aside in certain circumstances, including any agreement obtained by fraud. A financial agreement could be held void or unenforceable if there has been a material change in circumstances since making the agreement (circumstances relating to the care, welfare and development of a child of the marriage), unconscionable conduct, or it is impracticable to carry out the agreement. Any application to set aside a financial agreement requires evidence and, in most cases, may be difficult to establish
because of the requirement for a certificate of independent advice attached to the agreement itself.
While a financial agreement is not required to be fair, should an application to set aside the agreement be filed in the Family Court of Australia or the Federal Circuit Court of Australia and the Court decides that the grounds are justified, then the onus shifts to the other party to establish to the Court’s satisfaction that the agreement was in fact fair, just and reasonable.
What Limitation Period Should I Be Aware Of?
Following the breakdown of a marriage, the parties have only 12 months from the date of the divorce in which to make any application for property or financial spousal maintenance. In the event that the parties were in a de facto relationship, there are two years from the date of separation in which to make such an application.
What Are The Costs Involved?
The legal fee will vary on a case-by-case basis and is dependent upon many factors. These can include the degree of complexity, the age of the children, the instructions provided as to how the property is to be settled and the nature of the work to be undertaken.
What Is Your Next Step?
Property settlements and family law can often be very complex, depending on the various factors involved. For professional legal advice, contact Brydens Lawyers to arrange a consultation with one of our expert family lawyers to discuss any property settlement matter. Our team of experienced lawyers will offer expert legal advice to ensure that you achieve the most fair property settlement, no matter the size of the property pool, family home or investments.
Why Are Brydens Lawyers The Right Representation For You?
At Brydens Lawyers, we take the time to ensure that we have all of the relevant information and details concerning your matter available so that we can provide you with the best legal advice and representation, tailored to your individual circumstances. We have demonstrated expertise in resolving complex property and financial issues and can provide you with the necessary professional advice and representation to ensure you reach a fair and equitable resolution.
Our expert team of family lawyers will offer support and guidance throughout the entire property settlement process and will be there with you at every stage of your journey.
No matter your situation, whether marriage or de facto, involving binding financial agreements or other complex financial circumstances, our expert team of family lawyers will ensure that your family law settlement proceeds as smoothly and cost-efficiently as possible.
