One of the most daunting parts of separating from your partner, or even thinking about it, can be uncertainty of who will get what. All too often people make the assumption that things will automatically be split 50/50 or that they’ll get x, y and z – because that’s what ‘normally’ happens. The reality is that every situation is unique and every property settlement is different.
In this article we answer some of the most common questions we get about property settlements, how they work and how you get one.
If we go to court, how does the judge decide who gets what?
The Judge uses their discretion to come up with a property division that they consider is just and equitable, based on the following considerations:
- Is it just and equitable to adjust the ownership of the property of the parties?
- If so, what property is in the asset pool to divide?
- What contributions both financial and non-financial have been made by the parties by or on their behalf to the assets of the marriage in general?
- What future needs do each party have going forward including care of children, age and earning capacity, and health?
There is no way of predicting the exact result in the courts. It can often take 2 to 4 years to finalise a property settlement in the courts and be a very costly process. For this reason, many couples look to finalise a property settlement between themselves.
What is a property settlement?
A property settlement is a legally binding document that essentially documents who gets what, when a married or defacto couple separates.
A property settlement can cover almost anything and everything that is owned by the couple – from the family home, to investment properties, cars, white goods, superannuation, shares and investments, right through to artworks and sentimental items and even future inheritances.
Do you have to get a legal property settlement?
You don’t have to have a property settlement prepared by a lawyer. In some instances, you and your partner may be able to reach agreement on who will get what. Now, this is all well and good if you don’t have any significant assets. But if you do have significant assets (including property, cars or even a future inheritance) it can be very wise to make sure you have a legally binding property agreement in place. Without one, there is the potential for one party to dispute the agreement down the track and claim their right to assets.
The best thing you can do if you are separating is get independent advice from an experienced family lawyer, who will be able to advise whether or not you need a legally binding property settlement.
Do you need to be married to get a property settlement?
No, you don’t need to have been married to get a property settlement, it is also very much recommended for defacto couples who are separating and have significant assets.
Do you need to be getting a divorce to apply for a property settlement?
The simple answer is no. A property settlement can be drafted and agreed to at any time, regardless of whether or not you’ve filed for divorce, or were even married to begin with.
How long do you have to complete a property settlement?
If you are getting divorced, or have divorced, you need to commence property proceedings or file a settlement agreement with courts within 12 months of the divorce to avoid the possibility of a ‘claim out of time’ being made.
A ‘claim out of time’ can be applied if a married couple does not complete their property settlement with in 12 months of the date of their divorce certificate. It can also apply to defacto couples who do not finalise a property settlement within 2 years of separating.
If you do not complete your settlement or file with the courts within these time limits you will need to demonstrate hardship in order to have the matter heard by the court.
If you’re thinking about separating or getting a divorce, feel free to get in touch – we can help you to understand your different options and offer some valuable advice.