At the end of a relationship, it is necessary for you and your ex-partner to divide up your assets and financial resources. Time limits do apply so it is important to start this process as soon as possible. Contact Love Family Lawyers today for property settlement lawyers Brisbane.
Property settlement is the legal process of dividing property, assets, superannuation and debts between you and your former spouse or de facto partner, after your relationship has ended. The process is governed by the Family Law Act 1975, which sets out a pathway for making sure the property settlement is ‘just and equitable’ (often referred to as ‘the 5-step process’).
You can begin finalising your property settlement as soon as you have separated, and if you are married, there is no need to wait until you are divorced. There are time limits that apply, so it is often best to begin the process sooner rather than later.
You do not have to go to Court to do a Property Settlement, and most often people are able to reach an agreement via direct negotiations or with the help of a mediator. If an out-of-court agreement is reached, then it can be formalised either:
By filing an Application for Consent Orders (in which the parties jointly ask the Court to make Orders setting out their obligations); or
By entering into a Binding Financial Agreement (“BFA”), which is a special type of contract between the parties.
If you cannot agree with your former partner, then either one of you can apply to the Federal Circuit and Family Court of Australia (“FCFCOA”) for specific Orders about how the property is to be divided. Before applying to the Court, the parties are expected to comply with certain ‘pre-action procedures’ designed to make sure that people do not apply to Court without having made a genuine effort to reach an agreement first.
It is still possible to finalise a property settlement by negotiation or mediation even after a person has applied to the Court and very few cases end up having to be decided by a Judge. If a Judge does have to make the decision, they will hear evidence from you and your former partner and then apply the 5-step process to decide how the property and debts are going to be divided.
Love Family Lawyers can help you negotiate a fair property settlement with your former partner, and they can also represent you in Court or at a mediation if an agreement cannot be reached. We have an excellent track record of helping clients obtain a fair result without unnecessary cost and stress.
Property settlements for de facto couples are very similar to those for married couples; both involve applying the same 5-step process and are capable of being formalised by way of Consent Orders or a Binding Financial Agreement. If an agreement cannot be reached, then either party may apply to the Court so that a Judge can make the decision (provided the parties have complied with the pre-action procedures first).
Sometimes people cannot agree whether their relationship is a de facto relationship or something less significant. Since property settlements are only available to married or de facto couples, such disputes can mean the difference between a person being entitled to a property settlement or being left only with those assets (and liabilities) held in their name at the time of separation. The rules governing whether a relationship is a de facto relationship are set out in the Family Law Act 1975 and in case law and can sometimes be very complicated. If you are unsure whether your relationship is a de facto relationship then it is important to get good quality advice quickly.
Yes, if you have reached a financial agreement after the divorce as to how your assets are to be divided, it is vital that you formally document the agreement in the form of Consent Orders or as a Binding Financial Agreement (BFA). This is to prevent people from changing their minds or failing to follow through with what was originally agreed.
To find out more about the difference between a Binding Financial Agreement and a Consent Order, you can read about it here.
Having your property settlement formally documented also has the benefit of no Stamp Duty being incurred in any transfer of property, which could save you thousands of dollars.
Our property settlement solicitors can advise you as to the appropriate form that your agreement should take and draft the agreement for you at a competitive price.
A Consent Order is a legal document that is made with the agreement of all parties involved and is approved by the court if it is deemed just and equitable.
Although both parties might not have to show up in court if they apply for an Application for a Consent Order, it is very much like a court order.
Additionally, Consent Orders are binding on all parties and can be easier to enforce than Financial Agreements. To avoid enforcement action, which may be expensive, it’s crucial for parties to make sure you can abide by the requirements of the Consent Order before signing it. We advise examining your options with a lawyer to decide the best line of action because every case is different.
In some cases, the parties will have entered into a ‘pre-nuptial Binding financial Agreement’ or a ‘Cohabitation (de facto) Binding Financial Agreement’ before they separated. If those Agreements are properly binding and enforceable, then the property settlement will be governed by the terms of that agreement rather than the provisions in the Family Law Act.
If there is a dispute about whether such an agreement (or a part of it) is actually binding and enforceable then the Court is empowered to make that decision.
If the Court decides the Agreement is void/unenforceable then it may set aside (cancel) the whole Agreement and the process will be governed by the Family Law Act. If the Court decides to only set aside part of the agreement, then the part of the agreement that has not been set aside will govern the rest of the property settlement process.
If you have a pre-nuptial or cohabitation agreement and you or your former spouse think it might not be enforceable, then it is critical to get legal advice straight away since the consequences of such a dispute are often very serious.
The Court will consider a wide range of factors and issues when determining how the asset pool is to be divided. The process is often broken down into 5 steps (called the 5 step process). The 5-step process applies strictly to property settlements being decided by the Court. It is also important to know that the Court will only approve an Application for Consent Orders if the agreement between the parties looks ‘just and equitable’ according to the 5-step process.
Sometimes people wish to divide their property in a way that does might look unfair if considered only in light of the 5-step process. In such cases it is usually best to formalise the agreement via a Binding Financial Agreement (in which case the Court does not have oversight of the agreement).
The court may decide that it does not need to alter the property interests of the parties. If it comes to that decision, the court may decide to not make any orders at all, and the case will end.
If the parties have jointly owned property or, after a long relationship, property is held solely in one spouse’s name, then the court will usually decide that it is ‘just and equitable’ to make an order.
The Court will create a list of each party’s current assets and liabilities (including superannuation). This list is referred to as the ‘balance sheet’, ‘schedule of assets and liabilities’, or ‘the pool’.
Where an asset has been deliberately or recklessly destroyed or wasted (for example by giving it away), then the court may keep it on the list notwithstanding that it no longer exists. Such assets are usually described as ‘addbacks’ or ‘notional property’.
If the court decides that an asset is not owned by either of the parties, for example, because the asset is actually owned by a corporation or trust, then the Court may decide not to include it in the list of the asset pool depending on how much control the parties have over the relevant company/trust.
Using the evidence before it, the Court will attribute a value to each of the assets and liabilities in the list. This is usually done with reference to an independent valuation. You may not agree with the value the court (or its expert) gives to an asset.
Assets must be included in the list even where they were received after the relationship ended. That said, the mere inclusion of an asset on a balance sheet, does not mean that the court has decided that it needs to be divided between the parties.
The Court will then assess how each much each party contributed to the ‘acquisition, conservation or improvement of the asset pool’ and ‘the welfare of the family, including as homemaker’. Contributions by one party to the accumulation of assets are often (but not always) entirely offset by the other’s contribution to the welfare of the family. Once the assessment is complete, it is expressed as a percentage (e.g. 50% each if the parties contributed equally).
Contributions may be financial or non-financial. A non-financial contribution may be where one party has cared for the children thereby allowing the other to go to work.
A contribution may also be direct or in-direct. An example of an in-direct contribution may be where the parents of a party have gifted money or property to their child. This may be treated as a contribution on behalf of that party.
The Court does not always assess contributions as equivalent to their dollar value. This is particularly the case during a long relationship where assets brought into the relationship at the commencement of the relationship often little relevance to the final distribution. This was once called the “principle of erosion” and also sometimes referred to as the “merger principle”.
Having examined each party’s respective contributions, the Court will assess whether further adjustments should be made taking into account a variety of factors (often called the 75(2) factors by lawyers).
The list of factors/considerations is comprehensive, but the most commonly relevant are:
The court will use these other factors to adjust the percentage reached at the end of step 3. Adjustments between 1% and 10% are often seen.
Adjustments of more than 10% are rare, noting that a 10% adjustment from 50/50% to 60/40% results in one party receiving 50% more wealth compared to the other.
Any order that the court seeks to make must first be looked at to ensure that it is ‘just and equitable’. The Court may consider the way a person has conducted themselves during the relationship and since separation, for instance, whether they have purposefully or recklessly reduced the available assets for division.
A court cannot make an order that it is not ‘just and equitable’. However, their idea of ‘just and equitable’ may not be the same as yours, which can leave a party very upset. This is why a negotiated outcome may be a less stressful and cost-effective method of resolving your dispute.
The shorter a relationship is, as well as extremely small and large property pools, may result in a court making a decision which cannot be explained solely by following the above pathway. The 5-step process is only a guide and is not the only way a court may make decisions. It is however, the most common process followed by the courts.
Love Family Lawyers have a wealth of experience in property settlement matters and will give you accurate and easy-to-understand advice about how the 5-step process applies to your case.
If you have reached an agreement, then it is important to formalise it by either making an Application for Consent Orders or by entering into a Binding Financial Agreement; it is always risky not to formalise your agreement because the other side can still apply to the Court for Property Settlement Orders even after you have reached (and implemented) an informal agreement. Furthermore, there are certain tax exemptions to transfers of property between separated spouses that only apply if the transfers are pursuant to Court Orders (including Consent Orders) or a Binding Financial Agreement; these exemptions can often save you thousands and often outweigh the cost involved in formalising the agreement.
Generally speaking, Consent Orders are cheaper and less risky than Binding Financial Agreements, but they are also less flexible. Our property settlement lawyers are experienced in preparing Binding Financial Agreements as well as Consent Orders; contact us today to find out more about the difference and decide which is best for you.
When two people decide to go their separate ways, the process of dividing up their property can be complicated. This is especially true if the couple has a large number of assets. In most cases, it’s best to seek the help of a property settlement lawyer.
You may want to consider entering into a Binding Financial Agreement whilst you are still in a relationship so that you and your partner know what will happen to your property in the event of separation.
Sometimes property that is held in a Trust can be excluded from the Property Settlement process, however if the Court believes the Trust has been set up for the primary purpose of isolating assets from a property settlement, then the Court has the power to set the trust aside or direct its trustees to transfer property out of the trust.
Otherwise, some simple things you can do to protect yourself are:
Property settlement can be a difficult and stressful process, as you want to protect the property that’s rightfully yours. Love Family Lawyers can help by ensuring that the property settlement process is as smooth and stress-free as possible. We have a team of experienced family lawyers who can guide you through every step of the process – right after you contact us and all the way through to settlement. We have a client focused approach, which means that we always put your best interests first.
For property settlement assistance from our team of family law solicitors in Brisbane, please don’t hesitate to contact us today.
At Love Family Lawyers, we believe in providing our clients with fixed fees so there are no surprises. We also have a team of experienced property settlement lawyers in Brisbane who will work diligently to get you the best possible outcome.
If you’re looking for a property settlement lawyer, contact us today. We offer payment plans so you can get the help you need without breaking the bank.
At Love Family Lawyers, our years of experience in family law means that you’ll be supported by a specialised family solicitor who is focused on providing you with the outcome you seek. Family law services we can assist you with include: