Property Settlement – All you need to know!
Have you recently separated from your partner or spouse and are trying to determine how to divide your assets (property) and liabilities?
This is called property settlement. An arrangement can be made between you and your former partner/spouse as to how your property will be dealt with. This arrangement may be binding and enforceable.
The purpose of property settlement is to put an end to the financial relationship between you and your former partner/spouse.
In the event you and your former partner/spouse are unable to reach an agreement, you may apply to the Court for financial orders.
Assets & Liabilities
The first step to applying for property settlement or coming to any arrangements is to identify and value you and your partner’s assets, liabilities and financial resources. This is not limited to the assets and liabilities that were acquired during the relationship. Property owned prior to the relationship may be included.
Assets can include furniture, gifts, motor vehicles, real property, shares and superannuation. Liabilities can include mortgage, car loan, student loan, tax liability and credit card debt.
There is no certainty that the property will be divided equally between you and your partner/spouse; there is no formula that is used to divide your property. The Court takes into a number of factors when considering property settlement between spouses and partners.
- Assets and liabilities of both parties;
- Financial contributions by each party to the relationship/marriage (eg wages);
- Indirect financial contributions by each party (eg, gifts and inheritances from family);
- Non-financial contributions such as caring for children and homemaking;
- Future requirements considering age, health, care of children and ability to earn; and
- Whether the proposed property settlement is just and equitable.
The time to make an application for property adjustment is dependent on the nature of your relationship.
If you were married, you must make an application within 12 months of your divorce becoming final.
If you were in a de facto relationship, your application must be made within 2 years of the breakdown of the relationship.