Upon the breakdown of a marriage or a de facto relationship, the parties are entitled to divide their property interests. How to work out a final division is often a complex and detailed process. It involves the consideration of many facts and circumstances of each particular family situation. The Court has set out a four step approach in determining the division of property in Family Law matters, as follows:
Step 1- Identify and value the parties property, liabilities and financial resources. Property in this sense includes not only real estate but also all other assets such as shares, bank accounts, trusts and superannuation.
Step 2- Identify and assess the parties contributions, both financial and non-financial made directly and indirectly to the property of the parties and to the welfare of the family.A� This includes a consideration of contributions made by a party as home maker and parent.
Step 3- consider the future needs and circumstances of the parties, including the effect of any Order upon the parties earning capacity and other matters including:
- the age and state of health of the parties;
- the income, property and financial resources of the parties and their capacity for employment;
- whether a party has the care of the child;
- responsibility or commitment to support other persons;
- child support and pension entitlements.
Step 4- consider the effects of these findings so as to create Orders that are just and equitable.
A property settlement may be achieved by any of the following ways:
- Court Orders made by consent (Consent Orders)
- Court Orders after a defended Hearing
- Binding Financial Agreement under the Family Law Act
Most property settlements are achieved out of Court by way of negotiations between the parties. Once a settlement is reached, the agreement will be formalised by way of documentation prepared by your solicitor consisting of an Application and Consent Orders. The documents are filed in the Court but there is no need for any Court appearance to be made by the parties. Consent Orders are binding and legally enforceable and a cost effective method of resolving the Family Law property dispute.
If the parties cannot achieve a settlement then an Application will be filed in the Court being either the Federal Circuit Court of Australia or the Family Court of Australia. The Court will determine the division by consideration of all the facts and circumstances of the particular case. The Court process is lengthy, however, the Court encourages settlement at various stages of the process, in particular, by conciliation conferences held with the Registrar of the Court, the parties and their legal representatives. If agreement cannot be reached, then eventually the matter will go to a final Hearing before a Judge or other judicial officer.
Binding Financial Agreements
Binding Financial Agreements under the Family Law Act are also available to effect a Family Law property division. There are specific requirements that must be met for these agreements to be validly binding. Amongst other things, the law requires that the agreement must contain a statement that each party was provided with independent legal advice as to the effect and advantages and disadvantages of entering into the agreement and a certificate must be signed by an independent solicitor.
There are some time limits that apply to property settlements. Where a divorce has been granted, an Application for property settlement must be filed with the Court within 12 months from the date of the Divorce Order, unless the Court grants leave for the Application to be made out of time or both parties consent.
At Solari & Stock it is our principal goal to obtain the most advantageous settlement possible for our clients in a cost effective and efficient manner. We urge you to contact our Family Law Team whether just for preliminary advice or to take charge of your matter.