Financial Settlements
Relationship breakdown is often traumatic. Not only do you have to deal with the emotional impact but at some point, you need to make decisions about a fair division of property and assets – financial or otherwise. Property and assets may be divided between you and your partner by:
- Private agreements (you and your former partner around the kitchen table)
- Using solicitors to negotiate via letters,
- Going to court and having a Judge make a ruling
- Using a Family Law Mediator to help reach agreement and then having the documents formalised by the Court/Solicitors.
- Using Solicitor Assisted Family Law Mediation (mediation where you both have your lawyers present)
- Collaborative Law. (a meeting where lawyers, accountants, mental health professionals all work with you and your former partner to negotiate a settlement).
The division of property, assets and liabilities is not always straightforward. It is always recommended that you get legal advice so you understand your position fully and a Family Law Mediator can help you work out just what you need to ask your solicitor. It is important to get legal advice and formalise your agreement even if you amicably reached an agreement. If you go through the court, a judge’s job in making a decision about division of property is neither simple nor straightforward and discretion plays a large part. Keep this in mind when getting legal advice and ensure you have made full disclosure including assets, liabilities and entitlements. Family Dispute Resolution Practitioners cannot give legal advice. Their purpose is to ask the right questions and find the right solutions for your situation. If you have children, they will always keep the best interests of children at the forefront of negotiations.
It is important to understand that taking a Financial Settlement through the court will take in excess of 12 months to finalise. Your first appearance at court is to find out who your Judge is and discover what s/he wants you to do first, and ironically that is often mediation. It takes the form of court ordered conciliation and is conducted in court buildings with solicitors or barristers present, a court registrar mediates the meeting and there is often a strict time allocation. These first two court appearances will take months to come to fruition and cost many thousands of dollars. It is often recommended that unless you have a very large property pool, to try alternative solutions before proceeding down the adversarial path; legal avenues are always available if mediation fails.
When should we divide our property & finances?
You do not have to be divorced or separated before you divide your property. However, it helps if you have gone through the worst of the emotional upheaval and made some arrangements about your children. There are time restrictions for applying to court and they differ depending on your relationship .For divorced couples, you must apply to the court for a property settlement within 12 months of your divorce unless there are special circumstances. For de facto couples, applications regarding maintenance and property must be lodged within two years of the relationship ending.
De facto includes:
- Couples who have lived together in a domestic relationship for two years or more
- Have a child born of the relationship
- One of the parties having made such a substantial contribution that if the court did not make an order it would be unjust
- A registered relationship
The Four Guiding Principles of Property Settlement:
1/ What are the assets and liabilities?
The general assumption is any assets and/or liability acquired during the relationship are joint property
2/ Contributions?
As a rule, financial and non-financial contributions are weighted equally.
3/ Future needs and the issues which impact on them?
This looks at whether someone within the relationships be more greatly disadvantaged than another person by the breakdown of the relationship and how that will be managed
4/ Is the agreement Just and Equitable?
Any agreement reached must satisfy the Family Court’s requirements for justness and equitability.
If the agreement is deemed to not satisfy the just and equitable requirements of the court, the court may not formalise the agreement.
Most people have never had experience with Family Law when they find themselves looking for ways to finalise their separation and divorce. It is important to research your options and educate yourself about your obligations and rights under the Act. The Family Court website is a good place to start www.familycourt.gov.au
A Family Law Mediator will also give you information and help direct you to the best solutions for your family
