What am I entitled to in a separation in Australia?
Have you recently separated from a marriage or de facto relationship? Are you wondering what your rights or entitlements may be in relation to property settlement?
Read on to learn what you’re entitled to in a separation, how property settlement is determined in Australia and what you can do to best protect your interests.
Note: this article addresses property settlement issues with reference to the Family Law Act 1975 (Cth).
What is property/property settlement?
“Property” refers to the degree of power or legal relationship one exercises over something.
“Property settlement” refers to property division proceedings for parties to a marriage or de facto relationship.
Do matrimonial property settlements and de facto property settlements differ?
Matrimonial and de facto property settlements are very similar. However, a couple of key differences exist, including the time limits for making applications.
For parties to a marriage, an application for property settlement must be made within 12 months from the date the divorce order becomes final. In comparison, parties to a de facto relationship have two years from the end of their relationship to apply for property settlement.
In addition, to make orders for de facto property settlement, the Court must be satisfied with at least one of the following:
- That the relationship lasted for at least two years;
- That there is a child of the relationship;
- That a party to the relationship made substantial contributions and failure to make an order would result in serious injustice; or
- That the relationship is or was registered under a prescribed law of a State or Territory.
The Court’s approach to determining property settlement applications
Property settlements are determined on a case-by-case basis, and the Court will make whatever order it considers appropriate.
What you are entitled to walk away with in a separation in Australia depends on what the Court considers “just” and “equitable” under all of the circumstances.
Generally, the Court will adopt a four-step approach when determining a property dispute, including:
- To identify and value the net property of the parties;
- To consider the contributions of the parties;
- To consider the future needs of the parties; and
- To consider whether the proposed order is just and equitable.
1. Identifying and valuing property interests
The Court must identify and value the parties’ property, liabilities and financial resources.
For instance, the family home, motor vehicles, shares, mortgages, personal loans, superannuation, inheritances, gifts etc.
Debts are deducted from the gross value of assets to establish the size of the property pool and property available for distribution (%) amongst the parties. Both legal and equitable property interests are relevant.
Superannuation is dealt with in a separate property pool and can be split amongst parties.
Future expectations under wills, trusts and actions for damages are classed as financial resources and considered in terms of future needs.
2. Considering the parties’ contributions
The Court must examine the contributions made by the parties, both financial and non-financial, direct and indirect. These contributions may have been made to the acquisition, conservation or improvement of property or the family’s general welfare. Past contributions and contributions made after separation should be considered.
3. Considering the parties’ future needs
The Court must consider the future needs of the parties to determine whether adjustments should be made to the percentage of the asset pool that parties are entitled to.
This requires the Court to assess factors, including but not limited to:
- The age and health of the parties;
- The income, property and financial resources of the parties;
- The physical and mental capacity of each party for appropriate gainful employment;
- Whether either party has care and control of children;
- The eligibility of either party for pensions, allowances or benefits;
- The duration of the relationship and how it has impacted the earning capacity of either party;
- The provision of child support made by the parties; and
- The terms of any financial agreements binding upon the parties.
4. Considering whether the proposed order is just and equitable
Lastly, the Court must evaluate whether the proposed order for property settlement is just and equitable under all of the circumstances. This means the Court must be satisfied that the proposed property settlement is fair considering the contributions and future needs of the parties.
How to obtain a property settlement and protect your interests moving forward
You may choose to negotiate privately or mediate with your ex-partner to reach a mutually beneficial agreement without the assistance of lawyers or courts. This will surely save time and money in legal costs.
Alternatively, you may engage a solicitor to help you achieve a property settlement which you can live with and Consent Orders so that any financial arrangements are binding and enforceable in court.
As a last resort, court proceedings may be initiated to resolve property settlement disputes.
In any event, you should seek legal advice as soon as possible to understand what you’re entitled to in a separation in Australia.
Property settlements can be complicated, and it’s paramount you’re informed of your rights and entitlements before consenting to any agreements which might disadvantage you in the future.
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