Separating from your partner is a painful process, and the legal and financial paperwork that comes with separation may be the last thing you want to deal with. However, it is important that you address these issues in fairness to both parties. One major legal issue to consider is property settlement, which applies to both married and de facto couples.
A property settlement is an arrangement made between two parties to formally divide assets upon separation, including:
- real estate,
- superannuation,
- vehicles,
- money,
- inheritances,
- investments,
- business assets, and
- trust interests.
Property settlements can be undertaken with or without the assistance of the Court. Separating couples that are able to reach an agreement in regards to their property settlement among themselves can apply for consent orders. This can be done via your lawyer, or by using the Do-it-Yourself Consent Order Kits available from the Family Court of Australia in your state, or on their website. Consent orders will ensure that the property settlement agreement is binding and enforceable.
Separating couples who are not able to reach an agreement on the division of their property can file an application for property settlement in Court. For most cases, this will be the Federal Circuit Court or the Family Court. The determination of property settlement by the Court involves a four-step process:
- Identifying the assets that require division.
This includes going through financial records, disclosing the amount in individual bank accounts, and confirming the combined value of debts. - Assessing the contributions made by each party during the relationship.
These can include financial contributions such as wages or inheritances, or non-financial contributions involving maintaining the relationship, such as caring for children. - Assessing the needs of each party.
The Court considers the future needs of both parties based on factors such as predicted earning capacity, employment prospects, age, health, living requirements, and the responsibility for the caring of children under the age of 18 after divorce.
Confirming the fairness of the division to both parties.
After deciding the above steps, the Court will assess whether the division of assets is fair and equitable. They may favour disadvantaged parties who have significantly less earning capacity. For example, women with dependent children are often considered to be at a disadvantage when it comes to their financial situation and income earning potential after separation.
