Property Settlements | Spousal Maintenance | Family Law | Barwon CLS
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Property Settlements and Spousal Maintenance

The content on this site is information only and is not legal advice. If you need legal advice please contact us.

Negotiating your family law property settlement

If your relationship has broken down, or it’s likely to break down, one of your biggest challenges is negotiating a family law property settlement with your former spouse or partner. Learn more about your rights and obligations, how to divide property, what you need to consider, and how to apply for spousal maintenance.

Property settlements

What is a property settlement in family law?

When a couple separates, a family law property settlement determines how the assets and debts of the relationship are to be divided. All assets and liabilities (debts) of the relationship should be taken into account because the settlement aims to bring an end to the financial relationship.

There are various ways to reach a property settlement, and strict time limits apply.

Property refers to the things that can be dealt with in a family law settlement or Court Orders. It includes assets, debts and personal items, which are in your name (or your former partner’s name) and which are for your benefit. For example:

  • Real estate
  • Cars and other vehicles
  • Both cash and money held in joint and personal bank accounts
  • Family Trusts
  • Investments (for example, shares)
  • Superannuation
  • Businesses
  • Furniture
  • Whitegoods
  • Jewellery
  • Inheritances
  • Mortgages
  • Credit cards
  • Tax debts
  • Other loans and debts
  • Pets

Australian family law has a four-step process for working out how to divide the property of separated couples. The process applies to any married or de facto couples who are eligible for a property settlement.

To be eligible, a married partner can apply after separation and within 12 months of their Divorce Order.

A de facto partner can apply for a formal property settlement up to two years after separating if:

  • The parties had at least one child together; or
  • They lived as a de facto couple for at least two years

Sometimes, parties can’t meet the time requirements. It may happen because:

  • Their property settlements aren’t finalised; or
  • Their property settlement applications aren’t filed with the Court in time

If you’re in either of these situations, you will need to apply to Court have the matter heard out-of-time. The Court doesn’t always allow this. The best way to avoid these difficulties is to seek legal advice as soon as possible after separating.

For more information about applying for a property settlement, see How do I get a property settlement? below.

The four-step process is used when a Court is deciding how to divide property, during family dispute resolution (FDR), or when lawyers help to negotiate a settlement.

The process is for property settlements only. If you have children, see our pages on:

For spousal maintenance, see our information below.

Step 1 – Identify the property  

All property owned by you and your former partner, including any debts and superannuation, must be identified and valued. Once this happens, all property becomes known as the pool of property (or the property pool).

Property that you owned before the relationship or after you separated may or may not form part of the pool. However, it will need to be considered as part of the process.

If:

  • You’re concerned about any property that either of you acquired before or after the relationship; or
  • You suspect that your former partner is hiding property

you will need legal advice. Please contact us for a referral to a private lawyer.

Step 2 – Think about the contributions

This step involves a consideration of the contributions that both you and your former partner made to the relationship. An important aspect of this stage is that contributions can be financial and non-financial.

For example, suppose one party earned an income while the other party had no income, but looked after children and the home. In that case, the law considers that both parties contributed.

Depending on the circumstances, a contribution may also extend to before the relationship and after the relationship. For example, looking after children can extend for a long time after a relationship ends.

Other types of contributions may include:

  • Paying a mortgage
  • Contributing deposit money towards buying a house
  • Paying smaller bills such as electricity, rates and water
  • Owning property when the relationship started
  • Inheriting property
  • Doing renovations, maintenance or other work on a house
  • Setting up and running a business

It’s important to recognise your contributions to the relationship, especially if they are non-financial. We recommend that you seek legal advice. Please contact us for a referral to a private lawyer.

Step 3 – Think about future needs

Considering the possible future needs of you and your former partner is a critical part of the process. To work this out, it’s necessary also to consider both parties’:

  • Age
  • Health
  • Income earning ability
  • Need to care for any dependent children
  • Need to care for any children with special needs
  • Other means of support, for example, financial support from a new partner

For example, suppose you haven’t worked in many years because you care for a child with special needs. In that case, your future earning ability may be small. The property settlement may be adjusted in your favour to take this into account.

You will need legal advice about how a property settlement deals with your future needs. You may also need financial advice. Please contact us for a referral to a private lawyer.

Step 4 – Is the settlement fair?

            For a Court to make Orders, the settlement must be fair to both parties.

You can apply for a property settlement any time after separating from your husband or wife. You don’t need to be divorced.

If you’re thinking about dividing your property, you must be eligible to apply for a property settlement. You’re eligible if you are or were married, have separated, and you apply within 12 months of your Divorce Order. If you are or were in a de facto relationship, you can apply for a property settlement up to two years after separating, if:

  • Your relationship lasted for at least two years; or
  • You made significant contributions to joint property; or
  • You and your former partner had at least one child together

If you’re unsure whether you meet these requirements, contact us for a referral to a private lawyer.

Getting a property settlement can be as simple as discussing things with your former partner and agreeing on how your property should be split, including any debts. We recommend that if you’re able to agree privately, you should ask a Court to formalise the agreement with Consent Orders.

Often, however, property settlement negotiations are more complicated than a simple discussion which leads to an agreement.

Legal advice

You may disagree about the division of some, or all, of your property. Perhaps you struggle to understand how some of your decisions will affect you in the future. In other words, it can be challenging to know whether any agreement is in your long-term best interests.

Getting legal advice from the beginning of property discussions is an important and valuable way to ensure that you are considering all possibilities in the negotiation process.

Contact us for a referral to a private lawyer.

Family Dispute Resolution

Family Dispute Resolution (FDR) is a Government-funded service which helps separated couples agree on how to divide their property. It’s often a good option for negotiating a property settlement because:

  • It’s cost-effective
  • You may get a quicker result
  • An independent, qualified FDR practitioner helps you both find your way to an agreement

FDR practitioners can help you reach an agreement, but they can’t give you legal advice about whether the agreement is fair.  It’s important to get legal advice to make sure the agreement is in your best interests. Contact us for a referral to a private lawyer.

Some people may prefer to use a private mediator to discuss their property settlement because it can be a faster option. However, if you choose to use a private mediator, you will be responsible for paying the costs. Visit Family Relationships Online for a list of accredited mediators in your area.

For more information, see Relationships Australia’s guide, A fair share: Negotiating your property settlement.

Reaching an agreement

If, after private negotiations or FDR, you and your former partner reach an agreement for a property settlement, you can choose whether to keep it informal or to either:

  • Apply to a Court for Consent Orders
  • Make a binding financial agreement; or

Whichever option you choose, it’s essential to get legal advice before agreeing to anything.

If you choose to keep the agreement as an informal agreement (meaning that you don’t ask a Court to make Consent Orders and you don’t make a binding financial agreement):

  • You may have difficulties enforcing the agreement if something later goes wrong
  • You may have trouble proving that the agreement exists

There’s another situation which may arise from keeping the agreement informal. That is, either you or former partner could apply for property Orders at a later time (within the <time limits (link to How do I get a property settlement? Section below)>. It could disadvantage you if your circumstances change after separating, for example:

  • If either of you receives an inheritance or other windfall, it won’t form part of the property pool; or
  • If either of you can no longer work, it could affect your share of the settlement

Before deciding to make an informal agreement, contact us for a referral to a private lawyer.

Going to Court

If at either of these stages, negotiations break down, or if you’re not in a position to negotiate with your former partner, you may need to apply to Court for property orders. It’s an expensive and lengthy process, and you will need to consider your options carefully.

You can make an application to either the Federal Circuit Court or the Family Court of Australia, depending on how complicated the issues.

At every stage of the settlement process, you and your former partner must inform each other of your financial circumstances. If you have lawyers, this will happen through them. You both must provide documents about your financial circumstances, including:

  • Tax returns
  • Bank statements
  • Payslips
  • Superannuation statements
  • Property valuations
  • Other documents

Once the application is underway, the Court may hold some minor hearings to check on the progress or to make Orders to help the matter progress. The Court may also require you to attend a conciliation conference, which is another type of settlement conference. It’s run by the Court, but with an independent person managing it (a conciliator). In some cases, the conciliation conference is free. In other cases, you and your former partner will have to pay. 

At the end of this process, the Court will set a date for trial if you and your former partner are still unable to reach an agreement.

At trial, the Court will examine all the evidence, hear from the witnesses and then make a decision and issue Orders for property division. The Orders are legally binding, and you must obey them.

If you disagree with the Court’s Orders, you may be able to appeal the decision. This is another expensive and time-consuming legal process.

Before taking this step, you will need urgent legal advice. Contact us for a referral to a or a private lawyer.

Consent Orders are made by a Court, with the consent of the parties. In other words, both parties ask the Court to make the Orders.

Suppose you and your former partner agree on a property settlement. You can ask the Court to make Consent Orders reflecting the agreement. You can do this regardless of when you settle – either through private negotiation, in a family dispute resolution conference, or at any time before a trial ends.

A Court will make the Consent Orders if it’s satisfied that they are fair. Even if both you and your former partner agree to the settlement, if the Court doesn’t believe the agreement is appropriate, it won’t make the Orders.

We also recommend Court Orders which finalise a property settlement. If the other party breaches the Orders, you can ask the Court to enforce them. Because Family Courts have specific powers, they can deal with any breaches more effectively than other Courts. It’s generally a better option for anyone seeking help to enforce Orders.

However, once the Court makes the Orders, they’re final. They can’t be changed, unless one party can show the Orders were obtained dishonestly, by fraud, or other rare circumstances. You will need legal advice if you believe your Consent Orders need changing.

Suppose you choose not to use Court Orders to formalise your property settlement. This creates a risk that your former partner may apply to the Court for a property settlement at a later time (within the time limits). It means that you may be disadvantaged if your circumstances change after you separate. To avoid this situation, we recommend that you formalise your settlement agreement with Consent Orders.

While you’re negotiating your settlement agreement, we recommend seeking legal advice to discuss the possibility of Consent Orders. Contact us for a referral to a private lawyer.

A binding financial agreement (BFA) is also known as a financial agreement. It’s a legally binding agreement which may cover such issues as property division, spousal maintenance and child support.

A BFA is not a Court Order. In some circumstances, it may be suitable to finalise a property settlement. However, BFAs are not legally binding without both you and your former partner getting independent legal advice from a lawyer.

For advice on BFA’s see a private lawyer and seek independent financial advice.

If you were in a de facto relationship, you could apply for a property settlement if you meet the criteria. De facto relationship means that you and your partner were living together as domestic partners, but you weren’t married.

You can apply for a property settlement up to two years after separating, if:

  • You were living together as domestic partners for at least two years; or
  • You had at least one child together; or
  • You made significant contributions to the joint property

No. Australian family law recognises that non-financial contributions are as important as financial contributions because they contribute to the welfare and wellbeing of a family. For example, non-financial contributions can allow the other partner to earn an income or develop their career.

Non- financial contributions may include:

  • Caring for children
  • Caring for other dependent family members
  • Housework
  • Home renovations and maintenance
  • Unpaid work in a family business

You may have also made indirect financial contributions, for example, paying bills and buying food or other household supplies.

When negotiating a property settlement, a Court considers each party’s contribution, regardless of whether it was financial or non-financial. For more information, see How is property divided?.

If you and your partner bought the property during your relationship, it may be considered part of the pool of property . It would form part of your property settlement.

If your partner bought the property before your relationship, it may or may not be considered part of the property pool.

Every situation is different, so you will need urgent legal advice, and possibly a caveat. A caveat is a legal document used to stop the property being sold. The caveat may be in place until your interest in the property is established or resolved.

Please contact us for a referral to a private lawyer.

For more information, see How is property divided?

Any loans taken out by you and your former partner during your relationship may form part of the property pool. Loans (and other debts) are considered the property of the relationship. Usually, they’re dealt with in the property settlement. For example, as part of the settlement, you and your partner may agree to sell an asset to pay off (discharge) the loans.

If either of you had loans before or after the relationship, the situation is less clear. The loans may or may not form part of the pool of property, depending on the circumstances.

If your partner took out loans during your relationship, but you didn’t know, you will need legal advice.

Please contact us for a referral to a private lawyer.

For more information, see How is property divided?

A superannuation split (also known as a super split) is a division of superannuation. In other words, how superannuation is divided between you and your former partner. Both married and de facto couples can negotiate a superannuation split (although the laws in Western Australia are different for de facto couples).

You and your former partner can agree on a superannuation split. If you can’t agree, you can apply to a Court to decide. It’s similar to other property negotiations. For more information, see How do I get a property settlement?>

Superannuation is held on trust by a superannuation fund (or by a self-managed scheme). Because of this, you need the superannuation fund to agree to any proposed super split.

In most circumstances, you can’t cash in your share of the split. You would need to decide whether to roll over the entitlement to your super fund, or open a new fund. You need to give the superannuation fund a copy of your Court Order (for example, Consent Orders, or your binding financial agreement.

Before a split, superannuation must be valued. Valuing and then negotiating a split is a complex process, requiring an understanding of:

  • How the superannuation is invested
  • How it may change over time
  • Your future needs

We recommend that you seek independent legal and financial advice for superannuation splitting.

Vic and Dora’s super split

Vic and Dora separated eight months ago and are negotiating a property settlement. They have two children: Desi aged seven and Annabel aged nine.

After Dora had Annabel, Vic gave up his job to care for her. Dora returned to full-time work after her maternity leave. Since then, Vic has remained the full-time carer for the children and has performed most home duties. Vic hasn’t earned any income during this time. He hasn’t contributed to his superannuation.

Vic wants Dora to split her superannuation with him. Dora says that Vic isn’t entitled to it because she worked for it, so it’s hers.

Vic decides to see a lawyer, who tells him that he gave Dora ongoing support in caring for their children and running the household. It allowed Dora to continue to develop her career, increase her income and contribute to her superannuation.

As a result, Dora’s superannuation would be part of the property pool for discussion.

Vic’s lawyer writes to Dora, saying that Vic wants a super split and advising her to seek legal advice.

Household and personal items include:

  • Clothing
  • Jewellery
  • Furniture
  • Whitegoods, for example, fridge, freezer and washing machine
  • Musical instruments
  • Photos and memorabilia

Personal items may become part of the <pool of property (link to how is property divided? Section above)>. However, neither you nor your former partner may wish to contest less valuable personal items (for example, clothing). Personal items only need to be in the pool of property if you and your former partner disagree over who should have them.

Any personal items that you or your former partner acquired before or after the relationship could form part of the property pool, depending on the circumstances.

If you’re concerned about any personal items, we recommend that you seek legal advice. Please contact us for a referral to a private lawyer.

For more information, see How is property divided?

As much as we love our pets, Australian family law treats pets as property. If you and your former partner agree, you can make private custody or financial support arrangements for your pets. Still, this arrangement won’t be binding under family laws.

If you are negotiating a property settlement, or if you ask a Court to intervene, your pets will form part of the pool of property, and the four-stage test will apply.

Spousal Maintenance

What is spousal maintenance?

Spousal maintenance is a payment made by one party to another after their separation or divorce. It’s a financial support payment which is ordered by a Court. A Court may make an Order for spousal maintenance where there’s a significant difference in the incomes of the parties, as well as future income earning ability.

Former de facto partners can also apply for maintenance payments, if eligible. These payments are sometimes known as de facto maintenance.

To get spousal maintenance, you need to apply to a Court for Orders. You can do this any time after separating. However, you must make sure you apply within one year of your divorce becoming final, or within two years of the end of your de facto relationship.

If you and your former partner can agree on maintenance payments, you can make a binding financial agreement. You may also choose to seek Consent Orders.

If you don’t agree, you may have to start a legal action by applying to either the Family Court or the Federal Circuit Court. The legal process is similar to the process for property settlements. For more information, see How do I get a property settlement?If spousal maintenance forms part of a property settlement, you may agree to a lump sum payment. Sometimes it may take the form of ongoing payments. How a Court handles this depends on the circumstances.  

Regardless of the payment method, you will need legal advice. Please contact us for a referral to a private lawyer.

You can apply for maintenance payments, even if you weren’t married, so long as you meet the eligibility requirements:

  • You and your partner lived together in a de facto relationship before separating; and
  • You lived together for at least two years, or you had at least one child together; and
  • You apply for spousal maintenance within two years of the end of your de facto relationship

For de facto relationships, maintenance payments are sometimes known as de facto maintenance.

A Court will look at many issues to work out whether spousal maintenance is payable, how much should be paid, and for how long. Factors include:

  • The ages of both parties
  • The health of both parties
  • Any childcaring responsibilities
  • Whether either party is paying <child support (link to child support page)>
  • Whether either party receives Centrelink payments, and how much they receive
  • What standard of living the parties should reasonably expect
  • The parties’ financial contributions to the relationship
  • The parties’ non-financial contributions to the relationship
  • The parties’ future income-earning abilities
  • Whether either party has a new partner who provides financial support
  • How the property of the relationship is divided

You should seek legal advice about your spousal maintenance needs. Please contact us for a referral to a private lawyer.

When making an Order for spousal maintenance payments, the Court will usually set a time for the payments to end. It may be a date, or upon a particular event. For example:

  • When you get a job with reasonable pay
  • The death of either you or your former partner
  • You remarry
  • Your new partner financially supports you

If your maintenance payments end and you believe this is the wrong decision, you will need legal advice immediately. Please contact us for a referral to a private lawyer.

It is possible to change the amount of spousal maintenance in some circumstances. To do so, you need to apply to Court for a new Order.

Sometimes, there is a significant change in circumstances, known as a material change, for example, if either party:

  • Remarries
  • Starts living with a new partner
  • Loses their job
  • Is promoted
  • Has a large pay cut
  • Has a large pay rise
  • No longer has childcare responsibilities
  • Has health issues and can’t work

You can also claim there’s been a material change if you discover the other party has lied about or failed to disclose their financial circumstances fully.

If you need to apply for a new Court Order for spousal maintenance, you will need legal advice. Please contact us for a referral to a private lawyer.

How can Barwon Community Legal Service help me?

We can give you information and limited advice about property settlements and spousal maintenance. We can refer you to other legal services for representation.

Secure your future with a fair property settlement and spousal maintenance

We can help you find the right advice.

 

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Last modified on December 2nd, 2020 at 2:38 pm

The content on this site is information only and is not legal advice. If you need legal advice please contact us.