Property

Married or De Facto – it is the same for Property Settlement

Since 1 March 2009 (or 1 July 2010 if living in South Australia), married and de facto couples are treated the same under the Family Law Act 1975 when it comes to dividing property. It does not matter which state you live in.

A de facto relationship is any relationship where you have lived together as partners on a genuine domestic basis, for at least 2 year or you have had a child together. This includes same sex couples.

If you have a dispute about property after separation and need to go to court, the case will normally be held in the Federal Circuit Court of Australia, with more complex cases going to the Family Court of Australia.

Am I able to have a property settlement?

  • If you were a stay at home parent or did not earn much money during the relationship you are still entitled to a fair property settlement.
  • If you left the family home, you do not lose any right you may have in the house or any other property.

If you are unsure it is best to get some legal advice as soon as possible.

This is available from Legal Aid  – call 1800 019 343.

For more information see the Family Court of Australia website.

This Property Settlement Workbook produced by NQWLS can help if you are trying to negotiate a property settlement with your partner or preparing an application to a court for a property settlement. It has clear tables and explanations. 

What should I do to protect my entitlement to a property settlement?

The most important thing is to make sure that your partner cannot get rid of any significant property or significantly increase any debts without your consent until a property settlement is complete.

Things that you may need to do to safeguard the property include:

  1. Lodge a caveat – if your partner owns a house, unit or block of land and it is registered in your partner’s name only.  You may need to lodge a caveat on the title of the property at the Land Titles Office to stop them from selling, transferring or increasing the debt on it without your knowledge. Talk to a lawyer about this, especially if you become aware that it is on the market for sale.
  1. Tell your bank that you have separated and ask them what you need to do to ensure that any draw down/redraw facilities on your home loan/mortgage cannot be accessed without your signature.  See if any caps can be put on any joint credit cards and cancel any additional credit cards if you are the primary card holder.
  1. Cancel any accounts in joint names such as telephone, utilities and insurances.
  1. Take photographs  and / or make a list describing valuable property.
  1. Apply for court orders (injunctions) to stop property being sold or money being spent if necessary. You may also need a court order (called a flagging order) if your partner is about to receive a superannuation payout. If this is the case get legal help as soon as possible.

When should I do a property settlement?

You can do a property settlement at any time after separation.

Are there any time limits for a property settlement?

Yes.

If you are in a de facto relationship– you must apply to court within two (2) years of the date of separation. If you and your partner cannot agree about when you separated, it is always best to take a middle-of-the-road approach to avoid the possibility of being found to be out of time.

If you were married and are now divorced – you must apply to the court within 12 months from the date your divorce order becomes final (Decree Absolute).

Can I apply after the time limit?

You can apply to the court after the time limits have passed but you will need to get the court’s permission or your ex-partner’s agreement. This can be hard to do and it will increase your legal costs, so it is always best to try to observe the time limit. If in doubt, get legal advice as soon as possible.

Remember: You can have a property settlement anytime after separation whether you were married or in a de facto relationship as long as it is within the time limits.

How does the court decide who gets what?

The Family Law Act sets out what must be looked at in every property case.

Step 1: Look at whether it is fair for a property settlement to occur.

This may be relevant where the relationship has been very short, or where the partners kept their finances completely separate.

Step 2: Look at what there is to divide.

Identify and value all property (including debts) of each person regardless of who paid for it. The value should be the one at the date of the court hearing, not at the time of separation. Sometimes the Court will make a decision about certain property separately from the rest of the property (eg a large inheritance, gift or winnings or because one person has been wasting money e.g. gambling). It is helpful to make a list of property at both dates (date of separation, and the current date) to take to your lawyer for advice.

Property includes:

  • real estate, including the family home, investment or commercial properties;
  • cars, trucks, caravans, boats, trailers and motorbikes;
  • money held as cash or in bank accounts;
  • interests in any businesses or partnerships;
  • investments, including shares in a family or public company;
  • insurance policies;
  • superannuation;
  • jewellery;
  • furniture, furnishing and effects; and
  • any debts including mortgages, loans, credit cards and personal debts.

Any interest in a family trust will also need to be disclosed and will be taken into account.

Once you have identified the property, the next step is to value it. The court is really only concerned with the important assets, such as the house, cars, the family business and superannuation; not with items of household furniture and effects unless they are worth a lot of money.  The value the court uses is market value, not what you paid.

Here are some suggested ways to get values:

House – ask some real estate agents to look at your house and give an estimate of what they think it will sell for. It is a good idea to speak with more than one real estate agent. The estimates are normally free, but check first to make sure. If you are unable to reach an agreed value with your partner, you may need to both agree to appoint a qualified valuer to do a paid valuation. It is a good idea to get some legal advice before getting a paid valuation.

Cars, motorbikes and trucks – take the vehicle to a few car dealerships and get a trade-in price. You can also go to websites such as www.redbook.com.au or www.glassguide.com.au.

Superannuation –get the most recent statements from all of your superannuation funds. You can also send a Superannuation Information Request Form to each superannuation fund (including your partner’s) but some funds charge a fee so ask them about it first. The forms are available from the Family Court of Australia website in their Superannuation Information kit. You may also need a valuation if the superannuation is a defined benefit superannuation scheme (eg. government employees, judicial officers, defence force personnel).  This will cost more than the Superannuation Information Form and you should check with some specialised superannuation valuers about how much it will cost.

Family business – speak with your accountant or an accountant experienced in valuing businesses.

Step 3: Assess contribution

Look at what each person has given to the relationship (contributions) including property owned before the relationship, earnings, gifts, inheritances, personal injury or damages awards, redundancy payments, improvements to property and contributions as a home-maker and parent.

Step 4: Consider other legal factors

The court will look at other factors set out in the law, including:

  • the standard of living of each of you during the relationship
  • how much money each person could earn in the future, including payments from a family trust
  • age and health of each person
  • care and financial support of children
  • responsibility for looking after other people
  • the length of the relationship and its affect on each of you
  • the personal circumstances and financial position of any new partner.

Step 5: Decide how the property is to be divided.

Once the court has considered the first four steps, it must decide exactly how the property is to be divided, ie who gets what. It must then consider whether the way the property is divided is fair and reasonable in all the circumstances.

Although the court has to follow the same steps in every case, each situation is different. Do not just rely on what your family or friends tell you happened in their case. Get some legal advice. Even though a lawyer will not be able to tell you exactly what orders a judge will make because it will depend on the evidence on the day, they will be able to advise you of a range for a property settlement they think a court may make.

Can we come to an agreement?

Yes. It is a good idea to try to come to an agreement about property if possible because:

  • the law says you have to try to do this first before asking a court;
  • it is often quicker, cheaper and less stressful than going to court;
  • you have control over how the property will be divided; and
  • you are more likely to have a better relationship with your former partner in the future, which is especially important if you have children together.

Full & Frank Disclosure obligations

Before any agreement is made, it is very important that both of you have fully and honestly made known to each other all of your financial situation. This is a legal obligation and it starts before any court proceedings start.  For details see this family court publication.

A property settlement can be done in a number of ways:

1. You and your partner can agree on how to divide the assets and debts without any court involvement. The law is very particular about what it will recognise as a final property settlement. A verbal or written agreement is not legally enforceable and not recognised by the court as a legal document. It can be used as evidence of what was agreed.

2.  If you reach an agreement, you can make it legally enforceable by:

– entering into a Binding Financial Agreement which is a special written agreement prepared and signed by lawyers as well as the parties. You will need legal assistance to do this.                      OR

– by filing consent orders with the Family Court (a do-it-yourself kit is available)

Even if you both agree, the court will not make an order unless it is ‘just and equitable’, which means fair to both sides. An Application for Consent Orders will ask for detailed financial information from both of you so the court can satisfy itself that it is fair.

3. If you can’t reach agreement, you can apply to the court to decide. You should genuinely try to resolve the dispute first before going to court unless there is some urgency (like stopping the sale or loss of of assets / property).

When you apply to the court, you will have to go to a number of different court dates and events before the final hearing by a Judge. You can reach an agreement at any time during the court process. If you don’t reach agreement the Judge will make a decision at the final hearing.

Who can help?

You can get a lawyer to help you negotiate with your former partner. Even if you do not use a lawyer to help with negotiations, it is important that you get independent legal advice before signing any agreement.

There are mediation or Family Dispute Resolution Services that can help you reach an agreement. Mediators (or Family Dispute Resolution Practitioners) cannot give you legal advice, they are there to help you reach an agreement. The Legal Aid Commission provides Family Dispute Resolution services.

See family dispute resolution for more information.

Bankruptcy

If you or your former partner becomes bankrupt it can affect both of you and make any final division of property complicated. You should get legal and financial advice as soon as possible.

Becoming bankrupt means that any property that the person owns (with a few exceptions such as superannuation) will go to their bankruptcy trustee. This means that they can no longer deal with it, only the trustee.

Once either you or your former partner become bankrupt, the trustee will usually become a party to any family law court proceedings for dividing property. They will need to sign off on any agreement you make to divide up property.

When a party becomes bankrupt, the court, when deciding any property division, is being asked to consider the competing interests of the non-bankrupt spouse and the bankrupt’s creditors. Neither the spouse nor the creditors have any greater claim to the bankrupt’s property. The outcome will be different in every case. There may be things that you can do to protect your interest in joint assets such as the house if you think your partner is going bankrupt. Get legal advice as soon as possible.

A financial counsellor can help you if you are experiencing financial difficulties.

See Contacts for where to get help.

Spousal Maintenance

It does not matter if you were married or in a de facto relationship. You may be entitled to spousal maintenance.

Spousal maintenance is not child support and it is not child maintenance.

Spousal maintenance is financial support given by one spouse to another, usually when a relationship ends and for a period of time, so that the spouse can adequately support themselves.

What does a court consider?

A spouse is not automatically entitled to maintenance.  For a spouse to get maintenance they usually need to apply to the court and show that:

1. They cannot adequately support themselves; and

2. The other person is financially able to support them.

In deciding the application, the court will look at many factors including:

  • The age and health of each person
  • Your financial positions
  • Who has the care of any children under 18 years of age
  • Any commitments that each of you have to support others (new partners, step-children, etc)
  • The standard of living of each of you
  • How long you were married for and the effect it had on you

Just because you get government benefits, does not mean that you may not be eligible for spousal maintenance. For information on spousal maintenance and centrelink benefits see here.

Are there time limits?

If you are considering applying for spousal maintenance, it is important that you get legal advice quickly as it is best to apply as close to separation as possible.

You cannot apply for spousal maintenance without the court’s permission if:

  1. It is more than 2 years after separation from a de facto relationship;
  2. It is more than 12 months after you got divorced.

Spousal maintenance is usually only paid for a short period after separation (eg. 1-3 years). The main reason is to enable a spouse to get some skills and a job so that they can support themselves in the future.

How does spousal maintenance get paid?

It is usually paid in weekly or fortnightly instalments but it can be paid as a lump sum.

How do I apply for spousal maintenance?

If you and your spouse cannot agree, you can apply to the court before, at the same time or after there has been a division of property. It is quite common for a spouse to apply to the court and ask for orders to divide up the property and for spousal maintenance. The court will usually decide the property division first, and then the issue of spousal maintenance, unless there is some urgency or need for financial support before the property is divided.