The issue of property settlement can be dealt with immediately a decision is made that a marriage or de-facto relationship has broken down completely. Under legislation passed through parliament in 2009, property issues relating to de facto couples are now also dealt with under the Family Law Act.
Whether the relationship is a formal marriage or a de facto relationship, however, the best outcome is achieved by parties reaching an agreement. That result is most often achieved when both parties are assisted by experienced lawyers.
Two important steps in the process of advising a client are-
- To establish the value of the pool of assets both at the commencement of the relationship, and now.
- To work out the contributions of each party to the acquisition and maintenance of those assets (both financial contributions and non-financial contributions such as in the role of homemaker and parent).
When instructing a solicitor it is therefore preferable to bring with you, as many documents in relation to your financial history as possible, including:-
- Documents relating to the sale and purchase of any property
- Income tax returns and notices of assessment.
- Recent superannuation statements.
- Details of all bank and credit union accounts, whether loan or savings accounts.
- In the event of a business, financial statements and income tax returns of the business or partnership.
- Details of motor vehicles and other significant assets currently owned.
For the solicitor, the aim is to:-
- Provide advice as to an appropriate settlement.
- Work out a plan to reach an agreement with the other party so as to avoid commencing proceedings in Court.
- Negotiate with the other party or their solicitor.
- If an agreement can be reached, prepare documents to have the agreement “rubber stamped” by the Court so that there is an enforceable order on which both parties can rely.
- If agreement cannot be reached, to prepare documents to commence proceedings. The primary aim of proceedings is not to run a trial, but to put pressure on the other party to negotiate reasonably so as to reach a settlement.
- During that entire process to keep legal costs to a minimum.
Costs are charged on the basis of the time spent in carrying out work on your behalf. It follows, therefore that the sooner an agreement can be reached, the less costs will be charged. That process is assisted by you providing as many documents as possible.
Below are a number of facts about which clients frequently ask and which are provided to assist you to understand the process.
- You don’t need to be divorced to commence proceedings for property settlement, or obtain an order in relation to property.
- For married couples property proceedings must be commenced within 12 months of a divorce becoming final. The time limit does not begin to run until the divorce is finalised.
- For de facto couples:
- Generally speaking the parties need to have lived in a domestic relationship for a period of at least 2 years.
- That minimum time period does not apply where:-
- There is a child of the parties; or
- The applicant has made substantial contributions to the acquisition or improvement of the parties’ property.
- An application must be made within 2 years of the date of the relationship ceasing.
- If property is to be transferred as a result of the parties’ agreement, an exemption for the payment of stamp duty on the portion being transferred, is available. That exemption may save many thousands of dollars in, for example, a transfer of the family home from one party to the other.
- The parties agreement can combine any elements they wish – provided there is agreement.
- Portions of, or indeed a fund member’s whole superannuation fund, can be transferred to the other party as part of an agreement and consequent on a Court Order.
- Once an agreement is reached between the parties, it can usually be confirmed by way of a formal Order, within a few weeks of the agreement being reached.
- Of all property applications commenced in Court only about 12% proceed all the way through the process to a final trial.
- If proceedings are commenced in Court they can be stopped at any stage once an agreement is reached.
- Court fees include an application fee, and a fee for setting a matter down for hearing. The major cost to the parties, however, is to their legal representatives, and for expert evidence, such as property valuations, if they are required.
- On separation, parties should consider immediately completing a new Will, and if appropriate, a new Power of Attorney, and Power of Enduring Guardianship.
- Parties should also consider changing any nominated beneficiary for their superannuation fund, and making a “binding death benefit nomination” if that is available through your fund.
- If there is a dispute regarding children in addition to the property issue, both matters are usually dealt with together either by way of negotiation, or proceedings commenced in Court.
It is extremely important for parties to obtain independent legal advice as to their rights, as soon as possible, after separation, and the starting point therefore is to see a specialist family law lawyer.