What Is Property Settlement in Divorce?
Broadly speaking, property settlement in divorce refers to the division of assets (such as the family home, vehicles, savings, share accounts and/or the business), liabilities (such as credit card debts, personal or business loans, and/or the mortgage) and superannuation interests between separating parties. Property settlement is a much broader question than who gets the home after separation.
Can You Obtain a Divorce Order Before Having a Property Settlement?
Yes. You do not need to obtain a divorce before negotiating or applying for a property settlement. A property settlement can be negotiated or applied for at any time before a divorce has been applied for. However, once a divorce has been obtained, there are strict time limits (i.e. 12 months after a Divorce Order has been made) in which parties must apply to the Court for a property settlement (if one has not been able to reached by consent before that stage). If you do not apply within this time limit, you risk losing your right for the Court to make Orders in relation to property settlement/financial matters.
How is Property Settlement decided in Australia?
Australian law – much like most international law – seeks to find the most equitable outcome for both parties based on:
- Identifying the existing assets, liabilities and superannuation interests and the net size of the property pool available for distribution between the parties;
- Assessing the contributions (financial, non-financial and as homemaker/parent) each party has made toward the current property pool available for distribution between the parties and making any necessary adjustments in favour of one party accordingly;
- Analysing the current and future financial position of both partners (e.g. whether one party will have primary care of the children, whether there is an income earning disparity between the parties, whether there are any health concerns for either party, etc) and making an necessary adjustments in favour of one party accordingly; and
- Determining whether the adjustments made above are ‘just and equitable’ in all of the circumstances of the case
There is no fixed calculator, but your divorce lawyer should be able to give advice about what your range of entitlements are in a percentage form.
The importance of getting good divorce advice early:
Every divorce situation is unique and getting good legal advice early on can help to achieve an equitable and amicable result for all parties. It is important to understand how the Family Law Act relates to your individual circumstances and the various timings that must be adhered to.
Getting the wrong advice or going it alone may complicate matters unnecessarily and lead to extended proceedings and increased costs.
Understanding the legal options available and receiving help to navigate through the divorce journey early on is key to streamlining the divorce process and preventing unnecessary delays.