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One of the first and most important things to keep in mind if you are getting separated or divorced is that you can- and should- resolve your property and financial matters as soon as possible.
Australian law allows you to settle a division of property after you separate rather than waiting until you are divorced. In rare and in special circumstances of a particular case you may be able to divide property even if you are not separated.
If you wait until you are divorced, there are time limits for the bringing of court proceedings if you and your spouse are unable to agree. You have within 12 months after your divorce order is finalised to file an application in the court for a division of property. Your divorce order takes effect (or is finalised) at the expiration of one month from the date of your divorce order.
If you are not married but have been living in a de facto relationship, you must initiate your court proceedings within 2 years from when you separate.
If you fail to initiate proceedings within the time limitations, then you can still ask the court to determine a division of property which is referred to as “obtaining the leave of the court”. However, this process involves you in additional legal fees and there is no guarantee that the court will grant leave.
It is very important therefore, to get proper advice early from a qualified lawyer about the property settlement process. Even if you and your former partner have reached an agreement, you should consult a lawyer to review it and advise you how to ensure it is legally binding and enforceable. If you do not finalise your agreement by way of a consent order or financial agreement, you risk your former partner still seeking further property from you. It is important to understand that the property available for division between each of you is not the property which you owned at separation (although still relevant) but is the property owned by each of you or any entity which either one of you control and their respective values at the time you do the settlement. The values are not back dated to the date of separation.
The Initial Meeting and Assessment
In any case, this is what to expect during your first meeting with your lawyer. He or she will ask several questions to become familiar with your past and current circumstances. Do not be surprised if he or she asks detailed questions not only about you, but also about your former spouse and your respective finances prior to and throughout your relationship. Specifically your lawyers needs to know about:-
- All assets and liabilities in which each of you have an interest or own as well as any entity (such as company or trust) which you control or in which you are a beneficiary or potential beneficiary.
- Any superannuation entitlements
- Your employment and income
- Your bank accounts including credit card accounts identifying the balances or how much is owed.
- Any loans whether money owed by you or to you
- Whether you are expecting an inheritance or a damages claim.
- A list of assets, superannuation interests or debts which you had when you and your partner commenced to live together and an estimate of the values.
- Whether you or your partner received any gifts or inheritances, damages claims or any windfalls during the period that you lived together or after separation.
With this information, your lawyer can conduct a comprehensive assessment of the range of entitlements you might expect by way of a division of property and give you proper advice.
Your lawyer will also make sure you are fully informed about the assistance available to explore reconciliation or if there is no hope of reconciliation, the processes which are available for negotiation and mediation. The commencement of court proceedings is usually a last resort.
You need to be aware that you and your former partner must disclose to each other all relevant financial information to assist in negotiating an agreement. Failure to make a full and frank disclosure is against the law and risks any agreement being set aside by the court at a later date.
Methods of Resolution
If separated partners are unable to communicate to reach a mutually acceptable agreement between themselves, the lawyer can assist in reaching an agreement, as we have briefly mentioned upon earlier.
Ways in which agreement can be negotiated include: –
- Correspondence between your respective lawyers.
- A round table conference between each of you and your respective lawyers; or
- A mediation where each of you and your respective lawyers attend with a mediator who is an independent third party who assists you to broker an agreement.
If any of these methods are successful, your lawyer will prepare a written document to ensure that your agreement is legally binding and enforceable. The written document can either be terms of settlement which are filed in the court with an application for a consent order. If the court considers that your agreement is fair and equitable it will make the order. Alternatively, you can finalise your agreement by way of a financial agreement.
Going to Court
When all else fails and you have not been able to reach an agreement, the only option is to seek court intervention. To do so, your lawyer will file an application in the Family Law Court Registry.
Your lawyer will prepare an application, a financial statement and an affidavit.
Your application sets out what you seek by way of a division of property. Your financial statement must truthfully reflect your income, expenses, assets, superannuation, liabilities and any other interests such as an interest in a trust or an expectation to receive some money such as a damages claim or inheritance.
Your affidavit sets out relevant evidence to prove your contributions and other relevant factors in support of the orders which you are asking the court to make.
The court will provide a date upon which the application will be listed usually for a directions hearing. You will need to attend court with your lawyer. Usually your lawyer and the lawyer representing your partner are able to agree on the directions to be made for the further conduct of your case.
The fact that you have needed to file an application to bring the matter to a head does not necessarily mean that you will find yourself in court giving evidence before a Judge who will make a determination about a division of your property. In most cases, once the application is filed, with the assistance of your respective lawyers and either a Registrar of the court or a mediator, an agreement can be reached and finalised by way of a Court Order with your consent. Overall, there are very few matters which require a judge’s determination.
If your case does need to go to a final hearing, the Judge will read the evidence contained not only in your initial affidavit but any subsequent affidavits which are filed to update the evidence before it gets to trial which can be up to 12 months or more after you file your application depending upon the number of cases to be heard in the particular court. The Judge will also hear you being asked questions by your partner’s lawyer about the evidence you have set out in your affidavit. This is called cross examination.
After the evidence is finalised by way of affidavits and cross examination, your respective lawyers will make submissions to the Judge to persuade the Judge that the evidence supports the orders which you are seeking. The Judge will then give his or her judgment. Usually the judgment is not given on the spot but rather the Judge will take time to further read the affidavits and a transcript of the oral evidence and consider the matter carefully before giving a judgment.
Divorce and separation are never easy. Given the emotions involved, reaching agreements about financial matters and the allocation of property is not necessarily easy either. To learn more about how we can help you reach an amicable property settlement, please contact us today.
It is important to seek specific advice regarding your circumstances as this fact sheet provides general information only and does not constitute legal advice.