Property Settlement
What is a financial settlement?
A financial settlement involved dividing all of your assets (which both of you own together and separately) including your home, furniture, mortgages, debts, superannuation and income.
A financial settlement includes:
- Property Settlement: which is the division of all your ‘property’ which includes everything that has value
- Spousal Maintenance: This refers to financial support which may be required to be paid by one partner to the other partner who is unable to adequately support themselves. This usually is in the form of a weekly or a monthly fixed amount, however, it can also include lump sum transfers of money or assets.
How does property settlement work?
A division of your assets, liabilities, superannuation and everything else you own known as a property settlement. A property separation can be done any time after separation or for married couples, it can be done before divorce.
If you are married, you must finalise your property settlement or at least apply for a property settlement in court within 12 months from the date of your divorce.
If you are in a de facto relationship, you have two years from the date of your final separation to have formalised your property division or to have filed the relevant application.
We recommend you immediately seek legal advice if you are outside these timelines.
We can assist you in understanding the tips and tricks to a property settlement, plan, understand and negotiate an agreement to finalise your property settlement or apply to court to seek orders to complete your property settlement.
Do I pay money after separation? (spousal maintenance)
There are often times when one partner is unable to financial support themselves after separation. In these instances, the other partner may be required to provide spousal maintenance to the partner who cannot adequately support themselves financially.
Spousal maintenance can include:
- Periodic cash payments including a fixed amount of money every week or month
- Payments in kind including payment of expenses on behalf of a partner including mortgage payments, utility bills and other regular fixed expenses
- Lump sum payments such a $100,000 payment to enable the other partner to meet their living expenses for a period of time
Spousal maintenance is generally paid for a short or fixed period. It is not usually paid forever, but that depends on a case by case analysis of the situation of the parties.
What is a Binding Financial Agreement (BFA)?
You can finalise a property settlement by way of a court order by consent or following a trial, or by a Binding Financial Agreement.
A Binding Financial Agreement prevents the court from being able to make property adjustment orders under the Family Law Act 1975. The Binding Financial Agreement can also deal with spousal maintenance and prevent former partners from filing an application for spousal maintenance.
Binding Financial Agreements are made pursuant to one of six different sections in the Family Law Act 1975, including, in contemplation of, during and post a de facto relationship or in contemplation of, during or post a marriage.
Each party must obtain independent legal advice prior to signing a Binding Financial Agreement otherwise the agreement will not be considered to be valid.
In the event a party has not received independent legal advice, or signed the agreement under duress, undue influence and/or unconscionable conduct, the agreement can be set aside by the court.
How should I approach a financial settlement?
Financial settlement is a complex area of family law and we recommend you obtain specialist advice before taking any steps. This is because each situation is different and there are too many variables which can impact upon a successful property and financial settlement.