A property settlement is an agreement, arrangement or understanding made between parties to a marriage or de facto relationship to divide assets, liabilities, and financial resources when a couple separates. A property settlement can be made with or without the court’s assistance. In relation to an agreement between the parties that agreement can be converted into court orders. It can be done by making an application to the court for that agreement to be recognized as court orders.
Property owned before and after the separation can be included in a property settlement. Liabilities will also be divided between the parties, whether they are held jointly or individually, such as:
- Tax; and
- Stamp duty obligations.
Property for the purposes of a family law property settlement includes almost anything of value that we recognize and colloquially call “property”, such as:
- Real estate, either owned jointly or independently;
- Shares in private and public companies;
- Interests in partnerships;
- Interests in trusts;
- Inherited assets;
- Animals, other than livestock which would be treated as assets of the agricultural enterprise.
If you and your ex-partner agree you can prepare a written agreement in the form of a consent order and then seek approval from the court. Once you sign the agreement you state that you agree to the terms provided in the document, similar to the way a contract works. Once the court approves the order it is given legal effect. You may also apply for a consent order without going to court.
How much will I get from my property settlement?
Contrary to public belief, there is no presumption that property will be divided equally between the parties to a relationship. There is no set formula used by the court to determine a property settlement.
Each case is determined depending on the individual circumstances of the matter. You should seek legal advice for divorce agreement immediately if you believe the other party is attempting, or will attempt, to sell property.
Making a property settlement without the court’s assistance
There are many resources available that can assist you in making a property settlement without the court’s assistance. However, due to the complex nature of such an agreement you should seek assistance from a lawyer to prepare your legal papers.
If you can make an agreement without the court’s assistance, you will save your time and money. You may also be able to improve your relationship with the other party which may help resolve any future disputes. If you both agree on the terms of a property settlement you should have the agreement finalised either by applying to the court for a consent order or making a financial agreement. For that the best family lawyer in Sydney helps you protect your assets and fully ensures you’re protected if the marriage fails.
Court ordered property settlement
If the two parties cannot reach an agreement outside of court, they can apply to have a court make an order on their behalf. A court will only make an order if it is fair and reasonable to alter the parties’ property interests. The court follow this legal steps to determine how property is to be split between the parties.
5 Step Process
- Determine whether it is equitable and just in the circumstances to make a property settlement order by reference to those established interests;
- Identify the existing legal and equitable interests of each party to the property;
- Determine the direct and indirect, financial, and non-financial contributions such as salary, care of children and homemaking made by or on behalf of each of the parties as a percentage based entitlement;
- Consider whether a further amendment to the percentage based entitlement should be made taking into account the future needs of the parties (such as, care of children, health, financial resources, ability to earn); and
- Consider whether the result reached is a just and equitable result in all the circumstances.
A de facto couple has two years from the date of separation to make a property settlement. A married couple has 12 months from the time of their divorce is finalised. The court may grant an extension of time in exceptional circumstances, but this is rare. It may be within the interests of the parties to make a property settlement earlier, especially where assets belonging to the parties increase in value over time.