How to Get a Divorce and Property Settlement:
Step by Step Guide
What is a ‘Property Settlement’?
This article will guide you through the general process of how to get a divorce and how to obtain property settlement. This is a general term, which refers to the division of the property of the relationship. This occurs after the relationship has broken down. A property settlement can be achieved informally, via agreement between you and your partner, or formally, through Court orders.
The Difference Between a Divorce and a Property Settlement
A divorce is essentially a Court Order that ends your marriage. It is dealt with separately by the Court from any associated parenting and property issues. You do not need to be legally divorced to start parenting and/or property proceedings.
Once you are divorced you have 12 months to finalise your property settlement. Because of this, it is advisable to begin negotiating a property settlement with your former partner as early as possible. However, to begin your property settlement, you do not need to be divorced.
If you’re in a de-facto relationship, you have two years from the date of separation to commence Court proceedings for property orders.
Applying for Divorce
Before you apply for a divorce, you or your spouse must:
- regard Australia as your home and intend to live in Australia indefinitely, or
- be an Australian citizen by birth, descent or by grant of Australian citizenship, or
- ordinarily live in Australia and have done so for 12 months immediately before filing for divorce;
You will have to have been separated for at least 12 months (you can be ‘separated’ even if you are still living together), with no reasonable likelihood that you will get back together.
If you have children with your spouse that are under the age of 18 then you will have to satisfy the Court that you have made arrangements for their care. You will need to attend the Court if you have made a sole application and you have children under 18. Otherwise, you will most likely not need to attend the hearing.
There is a $900 Court Fee associated with divorces currently, although this may be reduced in some circumstances.
Divorces in most cases are a relatively simple process. Divorce can be achieved without legal representation through the Family Law Court website.
Property settlements, however, can be a lot more complex, and more often necessitate legal representation. You can have a property settlement agreement after divorce, or before divorce. Once you get divorced, you have 12 months to start property proceedings in court. Therefore it may be in your interests to begin property division before divorce.
Do I Need a Property Settlement Agreement after Divorce?
If you have been in a relationship for a relatively short period, and have assets acquired during the relationship, you will likely need some form of property settlement with your former partner. Also, if you have been together for a number of years or more, have children together and had assets when you commenced the relationship and/or have accumulated assets during the relationship, then the Court would be more likely to assess your contributions are equal to your partners, meaning there is more likely to be closer to a 50/50 split of assets. If you have only been married a short time, the property division will be more likely to reflect what the parties brought into the relationship.
Will I Need to Go to Court?
Not necessarily. At Sydney Divorce Lawyer our mission is to provide you with the most economical and just solution to your property division.
When you come to us with a problem relating to property after the breakdown of your relationship, our first aim is to see if it is possible to resolve the issues via negotiation. This will typically involve writing to your former partner and attempting to come to a mutually acceptable solution. Many of our clients have attempted to negotiate their matters themselves. Basically it is assumed that when they seek a lawyer we will be immediately applying to the Court for a decision. In fact, seeking a lawyer’s advice on your legal rights, and what you could expect if you went to Court for a decision, can focus the parties on the material (rather than emotional) issues, and narrow down areas of agreement and disagreement.
If there is no success or prospect of negotiation, then we can arrange a mediation for you to attend. Mediation is also an informal process, but involves the presence of a neutral party. This neutral party (or mediator) assists the other parties to reach a resolution. The benefits of mediation are that it is usually quicker and cheaper than going to court (litigation). Also the parties have more flexibility in designing solutions than a Court would provide.
Reaching an Agreement
If we reach an agreement outside of Court, this can be converted into “Consent Orders”. Subsequently these orders are filed with the Family Court of Australia. The benefit of having your agreement formalised into Consent Orders is that they are then enforceable. You can also have your agreement drafted into a “Binding Financial Agreement”. But, a B.F.A., however, requires both parties to seek independent legal advice.
If mediation in inappropriate in your matter, or is unsuccessful, then we can apply to Court on your behalf, and then the Court will make the final decision for the parties.
What are the Steps in a Property Settlement?
If you approach a lawyer for assistance with your property settlement, then the process will run roughly as follows:-
- The net asset pool will be determined.
This will require both parties to disclose their financial positions to the other party. This includes exchanging documents such as tax records, mortgage statements and bank account statements.
If we have applied to the Court for property orders, then both parties have a “duty of full and frank disclosure” of financial documents. The parties need to agree on a value of all the assets and liabilities and superannuation of the marriage. This may require experts to prepare valuation reports, especially where the asset is a business.
Trusts & Companies
If your matter involves assets of a trust or company then it will depend on the circumstances whether this property becomes a part of the asset pool. A relevant factor is how much control the party has over the trust or company, and therefore the associated property. Another relevant factor is the contribution to the property that the parties made, which is expanded upon below.
- The contributions of the parties will be assessed.
This includes both financial and non-financial contributions. Financial contributions include income, loan repayments, payment of expenses to maintain properties or cars or other assets. Assets brought into the relationship by the parties are also included. Also, the longer the relationship, the less weight this will carry. Non-financial contributions can include looking after the children or household and work towards a business.
- Assess future needs of the parties.
This will include earning capacity and care of the children, amongst other things.
- Assess whether the overall outcome is “just and equitable.”
These are the steps that the Court will also consider when assessing a property division.
International property law
Do you have assets overseas, such as real estate, an entitlement under anyone’s will or shares in a business, and require a property settlement agreement after divorce, or post separation?
If so, you should be advised that assets that either party owns overseas are taken into account in the property settlement. This occurs in step one outlined above, when the Court is determining the net asset pool. Because you have a duty of full disclosure under the Family Law Act, you must disclose these assets to the other side.
The term ‘property’ in the Family Law Act is defined very widely. It is defined to mean any property to which either party is, or both parties are, entitled. The Family Law Act gives the Court authority to make orders that have effect outside of Australia. This means that Australian courts can make orders regarding property outside of Australia.
The court will often deal with assets owned overseas by taking them into account when making orders to divide property owned in Australia. This is because there can be significant difficulties with enforcing property orders made in Australia, regarding property overseas. They are not always automatically recognised in other countries.
In other cases, the major assets of the relationship may all be held overseas.
The best way to deal with this situation is usually to initiate Court proceedings. This occurs in the Court of the country in which the overseas assets are held. If this is necessary, then at Sydney Divorce Lawyer we have access to a wide network of international lawyers. These lawyers are across many different jurisdictions. Accordingly these associates will work with us to provide you with access to justice overseas. This is an important point of difference for our firm that you will not have access to with most family law firms.
Is it Possible to Get a Pre-Nup (Prenuptial) to Effect the Final Division of Assets?
A “pre-nup” is known as a Binding Financial Agreement (“BFA”) in Australia. It is possible to have BFA, but these must be very carefully drafted. They are especially helpful for parties who have assets and/or children from a previous relationship.
What About Alimony or Spousal Maintenance?
Alimony is known as “spousal (or de facto partner) maintenance” in Australia. This is financial support paid by a party to a marriage/ de facto relationship to their former spouse/partner. This is in circumstances where they are unable to adequately support themselves. This means that maintenance is only ordered where one person cannot meet their own reasonable expenses from their personal income or assets. The Court will look at the age and health of a party, income and assets and ability to work. It will also look at what is a suitable standard of living and whether the marriage has effected earning capacity. Where applicable, we can seek maintenance orders on our clients’ behalf when seeking orders regarding the division of property.
If you require assistance with your property settlement agreement after divorce or separation, please get in contact and our expert family lawyers will assist.