Separating from a spouse or partner can be traumatic with many practical and financial considerations. A break-up places stress on the emotional wellbeing of all parties and can affect decision-making – getting the right advice early is important to ensure the best possible outcome is reached in your circumstances.
Married couples in Australia can apply for a divorce if their marriage has broken down irretrievably. There are a number of matters to consider but essentially the parties must have been separated for a period of at least 12 months, however this time can include a period of separation under the one roof. If you have children under the age of 18 years, you may be required to attend the court hearing. The court will need to be satisfied that proper arrangements have been put in place for the children.
If you have been married for less than 2 years, you may also be required to attend marriage counselling.
What is a family law property settlement?
A property settlement concerns the legal division of assets, liabilities and financial resources between a separated couple to legally finalise their financial affairs. A formalised property settlement enables the parties to end their financial relationship and move on with their respective financial activities, protecting these interests in the future. It also enable parties to have the benefit of various stamp duty and taxation concessions when transferring certain assets such as real estate in accordance with a formal order or financial agreement
De facto relationships
De facto partners can also access certain remedies under family law legislation in the event of a break-up. Generally, a couple is in a de facto relationship if:
- they are not legally married to each other; and
- they are not related by family; and
- they have lived together for a period of at least 2 years, share a child or own joint property together; and having regard to all the circumstances of their relationship, they have a relationship as a couple living together on a genuine domestic basis.
Several factors are considered in establishing these criteria including the duration of the relationship, the common residence, the existence of a sexual relationship, financial dependence or interdependence, ownership of assets, mutual commitment to a shared life, care and support of children and the public perception of the relationship. Same sex couples are recognised under family law legislation.
When can I obtain a property settlement?
A person may seek a property settlement once he or she separates from a former spouse or de facto partner. There is no requirement to be divorced before settling your financial affairs however the following time limitations are important:
- for de facto partners, any court proceedings for a property settlement (or spousal maintenance) must be commenced within two years of separation;
- for married couples, the time limit is 12 months from the date of a divorce order Even ex-partners on good terms should ensure that any agreement reached concerning the division of their property is legally documented and that each receives independent legal and financial advice early before finalising their affairs.
In some circumstances, it may be possible to apply to the Court “out of time”. For example, if your spouse agrees or in situations of hardship.
What steps are involved in dividing property?
The division of assets after separating can be achieved through a financial agreement, consent orders or court proceedings.
Most family law property settlements are finalised without going to court, which should only be considered as a last resort.
The Family Law Act 1975 (Cth) encourages separating couples to settle property issues amicably and full disclosure is essential.
When negotiating how property should be divided after a break-up the same steps that a court would take are generally applied. These are:
- identifying the parties’ assets, liabilities and financial resources;
- assessing the parties’ respective financial and non-financial contributions;
- evaluating the parties’ future needs including their relative earning capacities, state of health, education and responsibilities as primary carer of any children;
- making just and equitable orders in consideration of all circumstances.
Why financial advice?
It is essential that you are aware of the financial implications before you finalise a property settlement.
The retention, transfer, disposal or division of assets should be considered in light of taxation and stamp duty implications, the effect on your personal circumstances, and your current and future needs as well as the needs of children in your care.
Consideration should be given to the nature of assets retained or disposed of, as it may be more advantageous to you to retain one type of asset over another for example the family home or an investment property. It is important to understand and utilise the best structure to manage tax liabilities, achieve legitimate tax savings and safeguard, as far as possible, your financial future.
A superannuation split may form part of your proposed property settlement. Superannuation interests are considered legally as property and can be divided as part of a settlement upon breakdown of a marriage or de facto relationship. The split may permit the creation of a new superannuation interest for the non-member spouse / partner or a transfer or roll-out of benefits for the non-member spouse / partner to another fund.
The splitting of superannuation does not convert its value into cash as it is still governed by superannuation laws and will generally only be accessible at retirement age.
Sadly, relationships break down and when they do, it is best for all concerned if disputes can be resolved informally without the need to have the courts decide the outcome. Unfortunately, this is not always possible and court proceedings may become unavoidable.
With assistance from a legal expert, your options can be presented and explained so you can make informed decisions that are in the best interests for you and your family.
If you need any assistance contact one of our lawyers at [email protected] or call (08) 8344 6422 for a no-obligation discussion and for expert legal advice.
When a relationship breaks down things can be more complicated if children are involved. There is a presumption of equal shared parental responsibility in parenting matters, however each case is different and the Court will treat the best interests of the children as the paramount consideration if it is asked to determine parenting arrangements. In some circumstances it may be determined as appropriate that one parent have sole parental responsibility for children.
Shared parental responsibility does not necessarily mean that the children will spend equal time with each parent. That may not be practical or in the children’s best interests. Parental responsibility means having responsibility for important long term decisions for the children such as education and schooling, medical treatment and religious upbringing. Unless an order has been made for sole parental responsibility, parents are required to consult with each other before making important decisions relating to the children’s care.
In many cases the parties are able to negotiate satisfactory arrangements in keeping with the children’s best interests without the need for court involvement. In those cases agreed arrangements can be documented by way of an agreed parenting plan or formal parenting orders approved by the courts. This will generally be a less expensive and less emotionally trying process than having contested court proceedings.
Sometimes agreement cannot be reached. In those circumstances the courts can determine appropriate arrangements and parenting orders relating to the children on both an interim and final basis. The Court may also use Family Consultants (being Court appointed social workers or psychologists) to assist the Court in that regard.
In determining appropriate arrangements the courts may hear evidence from the parties, and make orders taking into account any history of abuse or family violence , as well as the relation of the children to each parent and other significant persons including grandparents, step-parents and others.
Parenting orders, whether they are made by consent of the parties or determined by the court, will typically deal with some or all of the following types of issues:
- where the children live
- what time they might spend with each parent and any conditions imposed on that time or relating to how they spend that time
- how the children can communicate with the other parent during times that they are not in their care and how they may or may not communicate with other persons
- how special occasions such as birthdays and Christmas are spent
- specific orders in relation to health care and medical treatment
- orders preventing a party from doing specific things such as drinking alcohol or using drugs when children are in their care.
In making determinations as to parenting orders the courts will take into consideration some or all of the following factors:
- the best interests of the children
- the ability of the children to have or maintain relationships with both parents
- the opinions of experts such as family counsellors, psychologists or psychiatrists
- the practicalities of any proposed arrangements such as distance between parent’s homes and schools etc
- any concerns as to domestic or family violence
- the wishes of the children depending upon the children’s ages and their ability to understand the affect of any orders or arrangements being considered
We can also assist with other common issues such as the rights of grandparents to spend time with grandchildren, applications in relation to relocation overseas or interstate, changed circumstances since orders may have been made, medical issues, travel and more.
In some cases, parents do not abide by or breach existing orders. In those circumstances if the matter cannot be resolved, then we can assist with court applications in relation to contraventions of orders.
Whilst we encourage you to try and reach agreement with the other parent as to the parenting arrangements concerning your children, if necessary we will conduct court litigation on your behalf when it is required and represent you to achieve the best outcome for you and the children involved.