5 Facts Your Divorce Lawyer Wants You to Know About Property Settlement

Contrary to popular belief, a divorce only legally ends your marriage; it does not divide your assets. Property settlement is an entirely different and separate legal process that should also be done with the help of a lawyer to ensure that your property is divided fairly and justly. 

Many Australians don’t grasp the complexity of property settlement nor its differences with divorce proceedings, however, it is important that you understand critical foundational aspects before you embark on either. At Prominent Lawyers, we will provide insight into this area of law, ensuring that you are equipped with the knowledge surrounding the basics of property settlement. This will not only make you a better client to your lawyer, but it will also help you to navigate what can be an emotional and confusing experience.

What is the difference between a divorce and property settlement and why do you need a separation lawyer for both?

Before we discuss both legal processes, let’s first distinguish them from each other. As mentioned before, a divorce is the legal termination of your marriage. A property settlement is the formal division of property following the separation of a couple. One process deals with the ending of a legally recognised union of two people; the other process refers to the separation of jointly owned assets.

For both, our team at Prominent Lawyers highly recommends that you hire professional legal help. Both processes carry sensitive and severe consequences and are emotionally exhausting. It is best that you have a clear-minded lawyer with the relevant expertise and experience to make the best decisions on your behalf.

5 things your divorce lawyer wants you to understand about property settlement

De facto couples can apply for property adjustment 

While property settlement may only be thought of in a case of divorce, i.e. the dissolution of a marriage, it is also applied in the separation of a de facto relationship. The Family Law Act 1975 contains mirror provisions that are applicable to both married and de facto couples. 

You and your former partner can begin property settlement proceedings as a de facto couple under the Family Law Act 1975, if any or all of the following conditions apply:

• your de facto relationship lasted for at least 2 years;
• you have a child with your de facto partner; and/or
• you have made substantial financial and/or non-financial contributions to the property or finances of your partner.

You don’t have to go to court to complete your property settlement case

Many people wrongly believe that all cases are completed in court, however, this could not be further from the truth. While you should acquire and maintain professional legal representation throughout your case, you do not need to go to court to come to a conclusion, you can settle out of court.

If you can arrive at a mutual agreement about property division, then court intervention, usually in the form of mediation is not required. After you settle on a mutual agreement, you can then make it legally binding through the following two pathways:

• file terms of settlement or Orders with the Family Court of Australia; or
• enter into a Binding Financial Agreement  (lawyers must independently advise both parties with this option).

This is important for each party to know before commencing property settlement proceedings because it shows that court intervention in the settlement proceedings (not the legalisation process) is not necessary. However, the absence of the court does not equal the absence of a lawyer as professional advice is incredibly important when dividing assets of both monetary and sentimental value.

There are time limits for commencing property settlement proceedings

There are time limits for commencing property settlement proceedings for both married and de facto couples. While you can commence your property settlement proceedings from the day that you separate, each has a deadline.

Married couples have 12 months to commence proceedings after the date that their divorce has become final. Persons in a de facto relationship have two years from the date of their separation. 

While there are a few exceptions, they are difficult to attain. Lawyers hope that potential clients are aware of this rule as some are often too late, resulting in a rushed or failed process.

If you’re unsure of the status of your case, then don’t hesitate to contact Prominent Lawyers.

Property settlement includes more than just ‘property’

While the term is deceiving in its name, clients should note that property settlement is not just about physical land or a physical structure. Property settlement covers all things owned by either one or both parties. They may include the following:

• cash and investments;
• personal property (cars, furniture, jewellery);
• property owned before the marriage/relationship;
• gifts and inheritances; and
• redundancy payouts.

Understanding everything that encapsulates ‘property’ in a settlement case will help clients to prepare for upcoming major decisions in the division of their assets.

50/50 split is not required

A common misconception is that property is always divided equally. The court is not mandated to split property evenly and instead, considers many factors when allocating property. Some of the factors that the court may consider include:

• future needs of each party (e.g. age, health etc.);
• non-financial and financial contributions to the welfare of the family; and
• property that was wondered before the marriage or relationship, including whether the other partners contributed towards the maintenance and accumulation of the property.

Bear in mind that the above is not an exhaustive list, and does not guarantee or negate a 50/50 split of property. As these factors are difficult to determine, especially in the eyes of the court, it is best that you hire a divorce/separation lawyer to ensure that you have the best shot of acquiring what you deserve.

Seek legal advice from one of our Prominent Lawyers.

At Prominent Lawyers, we know how difficult it is to divide your property. It is emotionally exhausting and legally complex, especially if your relations with your partner are tense. If you find yourself in the unfortunate situation of needing legal advice or services with your divorce, separation or property settlement, then contact a member of our team. 

Anthony Bazouni 

*The contents in this article are solely intended to provide general information in summary and do not constitute legal advice. We recommend seeking the assistance of a legal professional to discuss any matters at hand.