Property and Financial Orders
Kate Walker, Family Lawyer Gosford has focused solely on Family Law property settlement, divorce and children’s orders since 2009. Call Kate now on Free call 1800 891 691.
Finalising Property SettlementIt is always advisable to seek legal advice from a Family Lawyer.The Family Law Act 1975 requires parties, whether married or de facto, to end their financial relationship formally by way of Consent Orders or a Binding Financial Agreement.Formally ending the relationship between the parties prevents either of them from making any property claim against the other in the future. All forms of written agreement to finalise property settlement must also contain a full list of all of the assets, including superannuation and liabilities and the agreed values of each of those items.Same sex relationships are also dealt with in the same way as de facto relationships and marriages, that is, the same issues around children and property apply.
De facto RelationshipsA relationship involves 2 people living in a bona fide domestic relationship. For the Court to have jurisdiction to deal with that relationship, one of the following 3 things must apply:
- The parties need to have lived together for a period of not less than 2 years; or
- There has to have been a child of the relationship even though the parties may not have been living together for 2 years, a child of the relationship creates a jurisdictional ground for the Court; or
- If one of the parties has made a substantial financial contribution to the assets of the relationship. A significant financial contribution would be if the couple purchased a home together and both made a substantial contribution towards the deposit, not necessarily equally, and each signed up for the mortgage repayments.
- The duration of the relationship;
- The nature and extent of their common residence;
- Whether a sexual relationship exists;
- The degree of financial dependence or interdependence, and any arrangements for financial support between them;
- The ownership, use and acquisition of their property;
- The degree of mutual commitment to a shared life;
- Whether the relationship is or was registered under a prescribed Law of a State or Territory as a prescribed kind of relationship;
- The care and support children;
- The reputation and public aspects of the relationship.
How do you determine who owns what after separation?It is not relevant whose name the property is in. If the property was bought when you both were together it is still considered jointly owned.This is also the same for mortgages and debts that accrued during the relationship.All assets are included in the property pool including homes, cars, boats, bank accounts, shares, superannuation and all debts.
Are there time limits?
Married CouplesIt would usually not be advisable to rush into applying for a Divorce as soon as you have been separated for the required period of time. Property Settlement proceedings are required to be commenced within twelve months from the date of divorce.
De Facto CouplesDe facto Couples are required to commence property proceedings within 2 years from the date of separation.
LeaveIf property proceedings are not commenced within the time limits outlined above, a party will be required to demonstrate to the Court that hardship would be caused to the party or that a party would be unable to support themself without an income tested pension, allowance or benefit.
The 5 Step Process
1. Whether it is just and equitable to make an order in the first place:The Court must first look at whether it should seek to alter the property interests of the parties to the dispute.
2. Identify the property pool that exists:It is necessary to determine the net asset pool of the parties. To do this it seems quite simple, that is, subtract the liabilities from the assets to obtain the pool to be divided. This can become quite complicated if the parties’ assets cannot be agreed upon the byt he partities themselves. In this case, it may be necessary to obtain valuations of properties, business, self-managed superannuation funds and any other asset that forms part of the asset pool. It is best if parties are able to come to an agreement with respect to their asset pool. This will save them both time and money (See ‘What is Financial Disclosure’).
3. Assess the contributions of each of the parties:It is necessary to conduct an examination of all of the contributions (both financial and non-financial) throughout the marriage; including any initial contributions, contributions made during the marriage and any in the period following separation. These contributions include any gifts, inheritances, workers compensation payouts and the like received by either party. This is a complicated area of family law and each case is determined on its own set of facts.
4. Determine whether there should be any adjustment on account of a party’s future needs:Consideration will be given to whether there is any disparity in the future financial needs of the parties and whether one party should receive an adjustment because of such disparity. Such disparities include things such as whether one party has the care of a child or children under the age of 18 years, earning disparity, the age and health of each of the parties and the like.
5. What a just and equitable outcome is:Any alteration of the property interests of the parties needs to be undertaken in a just and equitable manner, having regard to all of the relevant circumstances.
Can I be paid Spousal Maintenance?In order to obtain spousal maintenance it is either agreed between the parties or ordered by a Court.Both parties will need to fill out a Financial Statement indicating all income and expenses. The party seeking maintenance must show a need and that expenses outweigh any income. The other party must also have the ability to pay Spousal Maintenance.
What is Financial Disclosure?In family law matters when the parties are dividing property, the Family Law Rules stipulate that each party must disclose to the other values of assets and debts.This not only includes property such as furniture, cars, art and the like. It also includes trusts (whether trustee or beneficiary), shares, managed funds, all financial resources, real estate, whole or part ownership of a business, superannuation, tax liabilities and any property that has been disposed of or acquired in the 12 months prior to separation or after separation respectively.Parties will be required to provide copies of bank and credit card statements for the previous 12 months and copies of tax returns for the previous 3 years. For the former matrimonial home, market appraisals by 3 real estate agents is a good way to start and formal valuation is only required if the parties cannot agree on a value. It is advisable to start collecting documents as soon as possible after separation.
Formally Finalising Property SettlementsThere are 2 ways to formally finalise a property settlement:
- Application for Consent Orders and Consent Orders, or
- Binding Financial Agreement.