09 Jun Ins and Outs of Property Settlements Part 1
Most people are not aware of their rights when it comes to property settlement at the end of a relationship. Most people are not aware that rights will accrue even though the parties were not legally bound by marriage. Property settlement rights accrue when assets have been accumulated during the relationship and sometimes significant rights can accrue even when the parties have only been together for a short period of time.
To explain the processes involved with determining how the assets of a relationship are to be divided we seek guidance from the Family Law act 1975 (Cth). The Act effectively forms a guideline that determines what factors must be taken into consideration by the courts when determining a party’s eligibility under property settlement divisions arising from both marriages and de-facto relationships.
What happens if we already agree on how we want to split our assets. Do we still have to go to court?
The simple answer is no. A large majority of couples divide their assets informally after separation without involving lawyers or engaging in the court process. This is probably the most common way of dividing assets particularly where there is minimal property to divide and the parties can agree. Whilst there is certainly nothing wrong with couples resolving their issues amicably, these types of agreements often fail to take into consideration the future needs of the parties and in some circumstances can mean that one party will be significantly worse off in the long run.
The next important thing to note is that these types of agreement are not legally binding and if one party reneges on the agreement down the track there is no legal way of enforcing the agreement. It should also be noted that even if the parties have reached a private agreement, this does not prevent either party from initiating court proceedings should they decide that they are no longer satisfied with the original terms.
One way that the parties can enforce the agreement that they have reached is to file consent orders with the court. This means seeking approval from the court that the agreement reached between the parties is just and equitable in all the circumstances and makes the agreement both legally binding and enforceable.
Commencing Legal Proceedings
As mentioned above when determining how the assets of a relationship should be divided between the parties, the court’s primary concern is to achieve a result that is just and equitable in all the circumstances. This means that the court has the power to equalise the parties’ positions through the alteration of property interests and in some cases awarding payments of spousal maintenance.
Is there a limitation on when proceedings can be commenced?
The window to commencing court proceedings in relation to property settlement varies depending on the type of relationship. The Family Law Act 1975 provides that parties who were legally married have a window of 12 months following the date of divorce to initiate property settlement proceedings. Whereas for parties who cohabitated in a de-facto relationship, the window in which they have to commence proceedings is two (2) years from the date of separation.
This does not necessarily mean that proceedings cannot be brought outside these time periods it just means that leave (permission) of the court must be sought first.