What is a Family Law Property Settlement?
Often bunched together with the idea of ‘getting a divorce’, a family law property settlement is where the parties to a divorce separate their assets from one another pursuant to the Family Law Act 1975 (Cth). This article is designed to provide a general overview of the property settlement process, however is by no means exhaustive, and it is important that you obtain personalised legal advice. It would also be helpful to check out our articles on getting a divorce and parenting orders.
Are you Eligible for a Property Settlement?
Property proceedings may be issued if either party is present or ordinarily resident in Australia or an Australian Citizen when the application is filed.
The Court can decline to hear a property application if proceedings are pending in another country.
The deadline for a property application is 12 months after a Divorce order has taken effect or 2 years after the end of a de facto relationship.
What is the Process for a Family Law Property Settlement?
The complexity of a property settlement will depend entirely on your individual circumstances. Hence we set out below a very brief outline of the main principles the Court looks at when deciding a division of property between parties.
Section 81 of the Family Law Act 1975 sets out what is known as the “clean break” principle. That is, the Court will look to make orders that will determine the financial relationship between the parties on a final basis, with the purpose of avoiding any further proceedings between the parties.
In order to achieve this, the Court enforces what is known as the “Duty of Disclosure”. Parties to any proceedings must make full and frank disclosure of all their assets, liabilities and financial resources (including superannuation, family trusts, etc) at the time that any property settlement is being negotiated. There can be very serious consequences if a party does not fulfill their disclosure obligations.
In approaching a property settlement, the Court first decides whether, on the facts and information it has, there should be any property order made. If the Court decides that there should be, then the Court will apply the four steps approach set out in the case of Stanford v Stanford [2012] HCA 52. Those four steps are summarised below:
Step 1 – Identify and value the property, liabilities and financial resources of the parties. It is important to note that the definition of property is extremely broad and that the value of the property is taken at its current date (or the date of the hearing) – not as at the date of separation.
Step 2 – Assess each of the parties financial, non-financial and welfare contributions as a percentage of the net value of their net total assets. Again, the definition of what is a contribution to the assets and the household can be broad and varied.
Step 3 – Assess whether any there are any applicable s75(2) factors (otherwise known as Future Needs) apply. Future needs factors include age, health, earning capacity and the care of children.
Step 4 – Consider the effect of all of these factors and consider what is “just and equitable” in all the circumstances.
It is important to note that there is no one strict mathematical formula that can be applied and the process is highly subjective. We can help you to assess what your property settlement should look like and can negotiate on your behalf, so that you receive the best possible outcome.
At Thornton + King, our expert family lawyers have decades of experience dealing with family law property settlements. If you would like to have a confidential discussion about your rights and obligations, give us a call or submit an enquiry now.
