- It's important to have a great lawyer to negotiate on your behalf!
When parties separate, their property (whether held jointly, solely or by a Company or Trust) needs to be divided. The Family Law Courts have the power to make orders dividing the property of the parties. This can be done by:
consent (when you both agree as to the property division) or;
by a Judge deciding your case after a trial.
When lawyers give advice about your entitlements they undertake the four step process set out in the Family Law Act 1975 and case law as follows:
- Determine the Net Asset Pool
This involves making a list of all the assets and liabilities of both parties or either of them. This is regardless of where the assets came from. If you had property prior to the marriage it still goes into the pool. If you received an inheritance after you separated then the inheritance is included in the asset pool as well. All these assets are referred to as “the matrimonial asset pool” regardless of where the asset came from or when it was received. Each item in the asset pool will need to have a value attributed to it - either by way of sworn valuations or by agreement between the parties.
- Assess the Contributions of the Parties
An analysis of each party’s contributions to the acquisition, conservation and improvement of the asset pool is undertaken. This includes financial contributions (direct and indirect), non-financial contributions (eg. renovating the house) and contributions to the welfare of the family (homemaker and parent). A percentage is then applied by your lawyer to both your contributions and that of your spouse.
- Assessing Future needs Factors
Determine whether any adjustment needs to be made to either party (or both) in accordance with Section 75(2) of the Family Law Act. This step is also known as “assessing future needs factors” of each of the parties. Here the Court looks to the future to see what further adjustment, if any, should be made to either party because all things may not be equal. The Court will look at the future needs of the parties taking into account issues such as state of health of each party, disparity of income, earning capacity, the care and control of children under the age of 18, financial resources and the like.
- Division of the Assets
Looking at whether the division of the assets is just and equitable between you and your spouse.
An application for a property settlement can be made at any time after separation. However, if a divorce has been obtained then the application for property settlement must be made within 12 months of the divorce having become final. If you do not bring the application within this time you will need to show the court that there are special circumstances which justify you bringing the application out of time.
Generally, when parties consult with a lawyer regarding property settlement the aim will be to try and have the parties reach an agreement without the need to resort to litigation. This not only saves time and money, but will save a huge emotional expense.
If you are able to reach an agreement with your spouse as to how your property will be divided, you will enter into either Consent Orders or a Financial Agreement to finalise the matter.
In the event that you are unable to reach agreement on division of property you will need to lodge with the Court an application for a property settlement. You have to show the Court that you have tried to settle the matter by going through the “pre-action procedures”. If you bring an application for a property settlement it does not mean that your matter will have to ultimately be heard by a Judge. Most matters are settled prior to that time.