There is a misconception that a divorce will also resolve your property settlement with your ex-partner: It will not. Obtaining a divorce order will not give you finality in your financial relationship with each other.
Divorce in Australia
For divorce in Australia, parties must complete a divorce application and file it with the court. The court will consider this material at a hearing, the date of which is set down when you file the application (usually 3 or so months after filing). If a divorce order is granted, this will provide you with a legal separation, however it will not automatically alter your property interests under family law.
To be eligible to apply for a divorce, you must have been separated from your spouse for at least 12 months. There can be circumstances where parties may have separated but they remain living together under the same roof for a period time or have had short periods of reconciliation and then separated again on a final basis. You may still be eligible to make a divorce application in these situations. You should speak to a lawyer to discuss your particular circumstances and confirm your eligibility and the court’s requirements.
Options for finalising a property settlement
Separate to a divorce, a property settlement will provide you with an alteration of property interests (for example, determining who will keep the house, or whether it needs to be sold; who will be responsible for the credit card liabilities; how superannuation will be split between you etc). The process for finalising a property settlement will depend on whether the parties have agreed or can come to an agreement regarding how their property interests should be divided.
If both parties agree
If a separated couple agrees to alter their property interests and the terms of that property settlement, they can have a legally binding and enforceable agreement by:
- Entering into a binding financial agreement; or
- Applying to the court for consent orders.
Using either option, or in some cases both options, your lawyer will need to take your detailed instructions in relation to the property that you own (including assets, liabilities, superannuation and financial resources), the contributions made by both parties throughout the relationship and any factors which may impact on the parties moving forward (such as age, health, income disparity, care of children etc). They will assess your entitlement and confirm whether your agreement is in line with what the courts would consider is just and equitable. They will then draft the required documents for you to affect the property settlement. There will be different processes from this point depending on which option you choose: binding financial agreement or consent orders.
If both parties cannot agree
Mediation is a process whereby the parties attend upon a mediator, with or without their solicitors present, to attempt to come to an agreement about the division of their property interests. The mediator should assist the parties to keep the conversation to relevant information and work with you to generate options for terms of settlement which are acceptable for both of you. If an agreement is reached at mediation, you can approach a lawyer to draft the relevant documents and finalise the property settlement.
Court proceedings are started as a last resort if the parties cannot agree on how to divide their property interests. Proceedings are not usually commenced without attempts to resolve the matter by way of negotiation or alternative dispute resolution as they can be costly and emotionally taxing on all parties involved.
A formalised property settlement will usually be required
It is important to finalise your financial relationship with your ex-partner. An informal agreement, even if it is in writing, may not be binding and one of the parties may be able to make an application to the court seeking an arrangement that is different to the agreement made between you (provided they apply within the relevant time limit). Therefore, having your agreement formalised through a binding financial agreement or consent orders is necessary to protect yourself moving forward. A lawyer can assist you with this and guide you through this process.
Time limitation for property settlement – married couples
There is a 12-month time limitation for a married couple to apply to the court for a property settlement or for spousal maintenance after a divorce order takes effect. Whilst the court can grant leave to apply outside of this time limit, it can be a difficult and costly process and success is not guaranteed.
In some cases, we recommend that parties enter into substantial negotiations before divorcing which often results in a resolved property settlement before an application for divorce is even made or a divorce order is granted.
What if we weren’t married?
Former de facto couples are substantially afforded the same rights under family law legislation to a property settlement as married couples. The time limitation is different however for de facto couples, whereby they have 2 years from the date of separation to make an application to the court for property settlement or maintenance. Like married couples, the court can grant leave to apply outside of this time limit but, again, this can be a difficult process and success is not guaranteed.
Talk to an expert
Contact Daykin Family Law to discuss your options with our Accredited Family Law Specialist & Director, Shannon Daykin. Let us help you navigate separation, divorce and the property settlement process in a cost effective and efficient manner.
