If you and your ex-partner or spouse separate or divorce, how you divide your property will be an important issue to consider at what is often an extremely stressful time.
Advice from a family lawyer about your entitlements and strategy, together with the process to be followed and the pitfalls to avoid, will assist you to negotiate and, if necessary, obtain from the court an appropriate outcome following the breakdown of your relationship.
This advice is also important when you are ready to formalise your property settlement agreement, given the many family law, tax and business consequences arising from separating family assets.
Cooper Grace Ward’s family lawyers have prepared this information to help answer some of the common questions asked and provide you with an action plan to begin resolving property settlements.
What is ‘property’ in a family law property settlement?
In a family law property settlement, ‘property’ includes a wide range of assets, from your home, savings and superannuation through to cars, business interests and even inheritances. Importantly, it also includes any liabilities and debts.
Here is a list of the property that will be considered in your property settlement:
- family home
- jointly owned assets
- savings and investment accounts
- business interests
- family trusts and other trust interests
- investment properties
Beyond these more common assets, there are a number of other assets that will also be considered, including:
- an interest in a company
- property owned in only one person’s name
- funds or interest over which a partner has influence or control
- assets owned before the relationship, during the relationship and acquired after separation.
How will the property be divided?
Despite what many people think, there is no 50/50 rule in family law property settlements. Each case is reviewed independently to determine the full range of assets, liabilities and financial resources owned by the couple. The court will decide on an equitable division of the property, taking into account the financial and non-financial contributions made by each person during the relationship, as well as each person’s ongoing or future financial needs.
The same process applies whether you are married or in a de facto relationship. This diagram shows the process used to determine the property settlement.
To reduce or remove the court’s jurisdiction to adjust a property settlement following a relationship breakdown, you may wish to enter into a binding financial agreement.
As with any contractual agreement, financial agreements must be carefully drafted and only entered into willingly by both parties.
In order for the agreement to be binding, each party must receive independent legal advice about the effect of the agreement on their rights and the advantages and disadvantages of entering into the agreement.
To learn more about binding financial agreements, watch our series of short videos covering all aspects of this topic, from the advantages and disadvantages of having a financial agreement, through to how to put an agreement in place.
What documents do I need?
We’ve prepared this checklist of the documents you will need to compile to help progress your property settlement. You don’t need to provide these documents at your first meeting with your family lawyer, but rather this checklist provides an overview of the information you will need to disclose as your property settlement progresses.
- Statements for all bank accounts and details of account numbers for the previous 12 months
- Details and records of any investments, including stocks and shares
- Income tax returns and assessments for the previous three financial years
- Social security pension or payment details
- Details and records of long service leave accrued
- Details and records of overtime worked for the previous 12 months
- Statement showing the current balance of your superannuation entitlements, including a completed ‘Superannuation: Information Required for Family Law matters’ form or a form that substantially complies with that form
- Valuation or appraisals of real estate owned by you
- Valuation or appraisals of chattels owned by you (including cars)
- Records and details of any life insurance or disability insurance
- Medical or psychiatric reports and medical certificates
- Details and records of any of the above that relate to children
Property settlement checklist and worksheet
We’ve prepared a checklist of the financial documents you will need to compile to help progress your property settlement, as well as a worksheet. You don’t need to collate them for your first meeting with your family lawyer, but this checklist provides an overview of the information you are required to disclose during your negotiation.
Download your checklist and worksheet now:
Are there time limits that apply?
You can determine your property settlement as quickly as you like after separation, although you and your ex-partner may need time for financial disclosure about your assets and also be emotionally ready to consider a settlement.
It is critical that you apply for a property settlement within a year of the divorce order being made. For de facto couples, the time limit is two years from separation.
How do I get started?
While you and your partner should discuss your property settlement directly if you can, do seek legal advice from a family lawyer before accepting or making an offer of settlement from your former partner. Often your entitlements will be different from those first offered.
Unless there are very special circumstances, once formalised your agreement is final and cannot be changed. This means it is crucial to have things done correctly throughout the process.
Cooper Grace Ward’s family lawyers can help by advising you about the range of your entitlements, negotiating your property settlement and formalising your agreement. You determine how much or how little assistance you need from us.
- No presumption of equality in family law property settlements.
- Inheritances and property settlement – will you lose the inheritance to your former spouse?
- The long arm of family law – clawing back assets that have been scooped out of the ‘pool’
- Your ex might want to buy a shiny new car with your money – but are you entitled to stop them?
- ATO draft ruling on Division 7A exclusions creates headache for spouses who receive payments from private companies under terms of matrimonial property settlements