Property Settlement Matters
The term “property settlement” refers to the division of property, liabilities and financial resources after separation. Although most property settlements are resolved amicably, there are situations where people just can’t see eye to eye on what’s a fair division of the property. In such cases, it may be necessary to make an application in either the Family Court of Australia or the Federal Circuit Court of Australia to being about a resolution.
In family law matters, the term “property” includes the family home, investment properties,, savings, business and farming interests, shares, furniture, artwork, jewellery, together with all other items of property that is in joint names, individual names or that of a company or trust.
Property is to be distinguished from a “financial resource” which is the value of an interest that has not yet vested in the parties name. Examples of financial resources may be an entitled to a bonus that has not yet been paid, accrued long service leave or a future inheritance or distribution from a family trust
Although financial resource will be taken into account when considering whether the terms of a proposed property settlement are just and equitable, they typically won’t be dealt with due to the fact it is not within the parties control – if it were it would be deemed an asset.
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If you have already seperated, or are consindering doing so, make sure you contact our team of family law experts before agreeing to a financial settlement.
Legal Process – Property settlements (same for both de facto and matrimonial)
The Full Court of the Family Court of Australia has approved the following four step process for resolving a property settlements:
De facto Property Settlements
Laws relating to de facto relationships
The approach taken to resolving a de facto property settlement has been the same as the laws relating to a matrimonial property settlement since March 2009. The Family Law Act, as it relates to de facto relationships, applies whether the de facto spouses are of the same or opposite sex. In resolving a de facto property settlement, the Court will following the same four step process as in a matrimonial property settlement (see above)
What is a De Facto Relationship
A person is in a de facto relationship with another person if they are not married or related, and are living together on a genuine domestic basis. In determing whether such a de fcto relationship exists, consideration will be had to the duration of the relationship, the nature of their common residence, whether a sexual relationship exists, degree of mutual commitment to a shared life, degree of financial dependence and interdependence together with any other relevant consideration.
As soon as two people start living together on a genuine domestic basis they will be deemed to be in a de facto relationship. Despite the common misconception, parties do not have to be living together for any particular time to be deemed to be living in a de facto relationship.
The duration of time de facto spouses are living together only becomes relevant when considering whether they have a right to seek a property settlement after separation.
Division of property and finances after separation. The Family Law Courts are able to make an order for a property settlement in de facto matter only if it is satisfied that:
- The total period of the de facto relationship is at least two years; or
- There is a child of the de facto relationship; or
- one of the parties made a substantial contribution to the relationship such that it woucl cause a serious injustice if an order were not to be made.
Accordingly, as soon as two people (or the same or opposite sex) are living together on a genuine domestic basis they are deemed to be living in a de facto relationship. They are able to seek an order or declaration with respect to the division of property interests once the court is satisfied that one of the factor listed above are present.
The approach that will be used to determine each of the parties entitlement to property following separation will be the same as that used for matrimonial property settlements, namely:
- Identify and value to the net property of the parties;
- Consider the financial and non-financial contribution bu the parties;
- Consider the future needs of each of the parties to determine if a further adjustment ought to be made;
- Consider whether the proposed orders are just and equitable in all of the circumstances
What is a property settlement?
Matrimonial property settlement refers to the division of property, liabilities and financial resources property following separation.
The Family Law Courts can order a division of any property the couple own, either separately or together with each other or is held in a trust or company they have an interest in.
The Family Law Act encourages parties to reach an agreement without resorting to costly litigation. In fact, it is a procedural requirement that both parties engage meaningfully in negotiations in an effort to reach an agreement prior to filing an application in the Family Court of Australia. Although this is not a procedural requirement for matrimonial property matters dealt with in the Federal Circuit Court of Australia, it is strongly encouraged as the success rate of mediation is exceptionally high; particularly when an experienced mediator is retained In addition, the high cost and lengthy delays associated with court proceedings should act as a powerful incentive to any one wanting to resolve a property settlement.
Where parties are unable to reach an agreement with respect to the division of the matrimonial property following separation, the Court may be called upon to determine how the matrimonial assets are to be divided.