Separation, Divorce, and the Division of Property
When a couple realises that their relationship or marriage is over and then decide to separate or divorce, it is likely to be the most emotionally intense experience a person can go through in their life. Many people tend to panic and rush this difficult process, but it is very important that you remain calm and make clear decisions when dividing your finances and assets between the parties.
There are a number of ways to divide your finances and assets whereby:
- You and your former spouse or de facto partner can negotiate an amicable solution as to how you divide your property without any Court involvement through a financial agreement; or
- You can apply for consent orders in the Family Court to formalise any agreement you come to with your former spouse or de facto partner; or
- You can file an application for property and/or financial orders in the Family Court if you and your former spouse or de facto partner cannot agree.
What Are the Pros and Cons?
We at AH2 Legal are of the view that reaching a mutual arrangement in which both parties will be happy is always preferable from the point of view that it would lessen the emotional and financial cost of legal proceedings. In addition to that, resolving things amicably allows for the possibility of maintaining healthy, continuing relationships as parents (if you have children).
Why have your agreement formalised in the Family Court?
The reason you should formalise any agreement made between you and your former spouse or de facto partner, is so that you and your former spouse or de facto partner will have the peace of mind that comes with knowing your assets will be divided exactly as agreed. Another reason why you should have a formalized agreement in the Family Court is so that you can avoid paying too much stamp duty/transfer duty (tax) by paying only the nominal fee of currently $20.00 whenever your agreement relates to the transfer of properties between the parties.
General principles of the Family Law Act 1975
When deciding on financial disputes, the courts observe a number of general principles as set out by the Family Law Act 1975.
These principles apply to all couples regardless of whether two parties were in a marriage or de facto relationship.
A Family Court judicial officer will base their decision on what is deemed to be fair and equitable after all relevant evidence is considered. The determining factors include:
- The value of your individual assets and debts and what they’re worth;
- What direct financial contributions were made to the relationship by each party (wages, salary, etc.);
- What indirect contributions were made to the relationship by each party (gifts, inheritances, etc.);
- What non-financial contributions were made to the relationship such as child raising, homemaking, etc.; and
- Other external factors like age, health, the ability to care for children and the future earning potential of each party.
As a result, any decision handed down will be based on your family’s unique set of circumstances. This makes it difficult to predict a likely result.
Going through this process may put increased pressure upon you and your family and it is advisable you seek legal advice before engaging with and taking the matter to Court.
Time Limits on Applications
The Family Courts observe two deadlines as they relate to:
- Spouses exiting a marriage – Applications must be submitted within 12 months of the date the divorce is made final; and
- Partners exiting a de facto relationship – Applications must be made within 24 months of the dissolution of the relationship.
If an application is not received during the abovementioned time limits, you will need to seek leave or obtain permission from the Family Court to file your application — something which is not guaranteed to be granted.
We at AH2 Legal understand that separation and divorce is a very difficult time for all parties. If you are struggling with any family or relationship issues and would like more information about how you may proceed, please do not hesitate to contact one of our friendly lawyers at (08) 6161 0243.