Following a separation, the parties are usually in dispute as to the division of assets which is also known as the property settlement.
The term “Property” refers to the family home, any investment properties, shares, cars, furnishings and superannuation. Regardless of whether these things were owned outright, or you were still paying them off, they all form part of a property settlement after you separate and need to be divided. Usually, all of the assets and liabilities of the parties will be considered together and this is what is referred to as the “property pool.” Regardless of whose name the assets or liabilities are in, they may still be considered to be part of the “property pool” for Family Law property settlement purposes.
There are three main ways to determine a property settlement (or divide your assets) and the path you take will depend on whether you are able to negotiate an agreement with the help of a lawyer.
The options available are:
1. By informal agreement between the two of you
2. By formal agreement i.e. Consent Orders or a Binding Financial Agreement
3. By Order of the Court
Informal Agreement
An Informal Agreement is exactly that – a decision that you and your former partner make by yourselves regarding how you will divide the property of your relationship. A number of couples try this approach if they feel that the separation may be temporary, and some think it will save them the costs of legal fees.
It must be said however, that the best option is to speak to a lawyer before dividing the property. Decisions made early on can often have implications in the future and it usually pays to take a more formal approach. It is important to understand that a failure to formalise your settlement can put you at risk of your former partner bringing a claim against you for property settlement, despite the fact that this may have been done informally. Formalising your settlement can also have cost benefits such as exemptions from stamp duty if assets are being transferred from one party to another.
Formal Agreements
A formal agreement is binding on both parties. This means, that when an agreement is reached there is no confusion and future conflict can be minimised.
Binding Financial Agreements are usually prepared by a lawyer. Both parties are required to seek independent legal advice before preparing a Binding Financial Agreement to ensure their interests are protected. When an agreement is reached it is documented and signed by both sides, then exchanged in the presence of lawyers. Once the Agreement is exchanged it becomes legally binding and neither party is permitted to approach the Court for Orders concerning the Agreement.
Consent Orders are made when couples agree on the terms of their property settlement (with legal advice from their solicitors). A document is then prepared by a solicitor, signed by both parties and filed with the Court. The Court approves the agreement, Orders are made to enforce the terms and these are sent back to the parties involved. In these cases the parties involved are not required to attend Court and it is a relatively simple process to achieve a legally binding result.
Court Orders
If you can’t reach an agreement with your former partner regarding a property settlement, then you will need to file an application for property settlement in the appropriate Court.
For more information on property settlement after separation, contact the Family Law team at Meehans Solicitors today on 4627 3333.
This article was published on 21/01/25 and the information is valid as at the date of publishing. This article is general in nature and is not and should not be considered or relied on as legal advice. Meehans Solicitors is not responsible in the event this information is relied upon by the reader in the absence of specific legal advice.
