The Court can make Orders in relation to the division of property following separation of a married couple. Parties can obtain Court Orders in relation to how the asset pool of the parties is to be divided. Property Orders can be made by way of Consent Orders if the parties are able to agree, or by the Court following the issuing of court proceedings.
Property Orders can cover all assets of the parties including:
They also can cover liabilities from the marriage (i.e. credit cards debts, mortgages, personal loans, CGT liabilities, etc).
The Court making the Orders will consider the contributions of both parties, including: financial contributions, non-financial contributions and contribution as homemaker and parent.
Defacto partners separated after 1 March 2009 can now apply for property and maintenance orders under the Family Law Act in the same way as a married couple.
You are not required to get a property settlement when you separate or divorce. You may sort out your financial arrangements informally without going to court.
If you would like a property settlement, this may be by consent or by seeking financial orders. Both types of property settlements are only ordered if it is ‘just and equitable’ to do so. Just and equitable roughly means what should be fair in the circumstances of each matter.
A property settlement may be ordered to make an adjustment to current ownership of the assets. A property settlement is intended to acknowledge the property each party brought into the relationship, what they developed during the relationship, and what their needs are as they end the relationship.
Agreements can made privately or with help from other parties. Other parties may include mediators, financial advisors and court services. Some of the most common ways of coming to an agreement are privately, through mediation or through conciliation.
Parties can privately come to their own agreement on how to divide their assets. They may do this verbally or in writing. A more formal process is mediation. Mediation involves the two parties discussing their issues and attempting to reach a mutually acceptable outcome with the help of an independent and impartial third party called a mediator. A mediator can advise about processes and the rights of each party but cannot suggest outcomes. A mediated agreement is unenforceable unless it is filed with the court as consent orders. Conciliation is similar to mediation except the third party is called a conciliator and they can suggest outcomes (though parties are free to ignore their suggestions).
Sometimes an agreement cannot be reached between separating partners. Court proceedings may be necessary in cases such as where there is family violence or when one party has unreasonable demands and will not change their position.
When making a property settlement, a judge will look at the contributions of each party to the relationship. A contribution may be financial, such as bringing an asset into a relationship, or non-financial, such as caring for any children.
An adjustment made for the other party because of their contributions to raising the children is intended to acknowledge several factors, including:
• The career opportunities one party took while the other stayed at home
• The career opportunities one party missed by staying at home
• The difficulty a stay-at-home party might find in re-joining the work force
A court is unlikely to give ‘everything’ to either party. It will try to order what it thinks to be just and equitable. If you are unsure about what the court may order, trying to reach an agreement is a positive step you can take to have more of a say in the outcome of a property settlement.