At the end of a relationship there will often have to be a division of assets or a property settlement.
The Family Law Act 1975 covers matters relating to property settlements for married couples and de-facto couples (including same-sex relationships). A financial case can cover such things as property settlement, maintenance, child support or financial enforcement. “Property” can include your home, other real estate, money in the bank or other financial institution, cars, boats, investments, business interests, household contents, and Superannuation.
There is no presumption that the property should be divided 50/50, 60/40 or in any other proportion. The Family Law Act sets out the factors which must be taken into account when a Judge has to consider how property is to be divided.
The Family Law Act 1975 sets out the general principles the court considers when deciding financial disputes after the breakdown of a marriage or a de facto relationship. There is no universal formula to apply as a property settlement is based on discretionary criteria. Each person’s situation is different and should be carefully assessed by a family lawyer qualified to give the right advice.
The factors which the Family Law Act specifies must be taken into account are as follows:
- Assessing the current value of the property concerned and the extent of any liabilities
- Assessing the direct financial contributions by each party, for example, assets and savings owned at the commencement of the relationship.
- Considering the indirect financial contributions by each party, for example, gifts and inheritances from families.
- Considering the non-financial contributions to the marriage or de facto relationship, for example, caring for children, being the homemaker and maintaining or improving the property.
- Taking into account future needs, for example age, health, financial resources, care of children and income earning capacity.
- Finally, after considering all of the above, the final consideration is to apply the test of whether any proposed property settlement is fair and equitable in the circumstances.
The way your assets and liabilities will be shared between you will depend on the individual circumstances of your family.
There is no law against making your own informal property settlement without lawyers and outside the scope of the Family Law Act. However, unless a settlement is approved by a Court, or a formal binding Financial Agreement is made pursuant to the Family Law Act, an informal property settlement is not regarded as binding. This means that one of the parties could renege on it and be entitled to apply to the Family Court for a greater share of the property in the future.
Arrangements for the division of property usually occur in one of the following ways:
- By informal agreement between the parties;
- By Agreement registered in the Court;
- By Court Order following contested Property Proceedings.
Reaching an agreement is always the preferred way to settle property disputes. If agreement is reached on the division of property at mediation this can be formalized by way of Consent Orders or Binding Financial Agreements. Formal agreements are not always required but they do provide you with the confidence to know that any agreement reached is legally binding and enforceable in the future.
If agreement cannot be reached by way of mediation then your matter may proceed to the Federal Circuit Court or the Family Court for determination.
The long delays experienced in court proceedings coupled with the expense of court proceedings certainly make going to court the less preferred option.
Full and Frank Disclosure
If you are involved in a case about property you are required to make a “full and frank disclosure” to the other party about all of your property, superannuation, financial resources.
Mediation and Negotiation
The Family Law Rules require you to take certain steps before you commence legal proceedings in the Family Court (These steps are called Pre Action Procedures). The Pre Action Procedures are intended to encourage parties to resolve matters through negotiation rather than having a Judge make a decision in Court. Unless your case is urgent, or involves some exceptional factor, such as allegations of abuse or fraud, you must:
- Make a genuine effort to resolve the dispute through counselling or mediation;
- Providing the other party with copies of relevant documents;
- Make a settlement offer;
- Advise the other party of the orders you will seek from the Court.
At Louise Coady Family Lawyers we have experience in assisting parties to reach agreement through mediation in property disputes. We can assist in formalising any agreement into the appropriate form, and indeed it is our preference that mediation be the preferred method of reaching agreement.
We do however understand that that agreement is not always possible and we have the knowledge and expertise to assist you in contested property/financial Court litigation.
Please contact us to make an appointment to discuss how Louise Coady Family Lawyers can support you.