Property matters can be resolved once you have separated.
If you have a pre-nuptial agreement in place, then you can divide property and financials according to the agreement.
How is property settlement determined?
In Australia, the Family Court will look at the following:
- What assets each person bought into the marriage
- What contributions each person made respectively throughout the marriage (including contributions as a parent and homemaker) and
- The current and future needs of each person
Generally, the parent who looks after any children during the marriage and continues to do so after separation, will receive a larger share of the assets of the marriage because their needs will usually be higher.
What should be included in a property settlement?
Property and finances should include all assets and liabilities. Any asset and/or liability can be owned individually, jointly, by a family trust or family company.
Assets include items, such as:
- Property (family home and investment properties)
- Motor Vehicles (including boats, motorcycles etc…)
- Bank accounts
- Sole Trader Business, Partnership or Company
- Any other assets (ie: furniture or jewellery)
Liabilities can include:
- Loans (ie: personal loan or card loan)
- Credit cards
- Personal debts
A family lawyer is able to assist you in identifying all your assets and liabilities.
Issues with negotiating property settlement
Common issues which arise in property settlement disputes include –
Refusal to move out of home
Most people don’t realise that they do not lose their right to a share of the house if they leave. This common misconception usually causes issues when an ex-partner continues to stay in the family home yet refuses to communicate or begin the process to resolve property matters.
This often occurs when one person has managed the couple’s finances throughout the relationship. This, in turn, enables the person to not hide assets. Hiding assets during a separation or divorce is unethical and illegal. However, it happens quite frequently. However, an application can be made to the courts for that person to provide sworn documentary evidence disclosing their various income and assets. This is to ensure proper assessment can be made for the purposes of dividing assets between the parties.
Generally, there are two options in regards to Superannuation:
- You can agree to split the super 50/50. This means half of your super will go to your former partner and half their super will go to you.
- You may agree to a trade-off of other assets now. For example, you may agree to less super so you receive more money from the sale of the house.
If you and your ex-partner run a self-managed super fund (SMSF), then your situation is more complicated. This is due to your ex-spouse or partner also being the trustee of the SMSF. In this situation, the best thing to do is to obtain legal advice.
Are property settlements in separations taxable?
Selling items like marital home, investment properties, shares and companies can attract Capital Gains Tax (CGT) if not completed correctly. In many situations, tax and stamp duty issues arising from property settlements can be minimised or entirely exempt. It is important to obtain legal advice regarding these matters before reaching an agreement.
Formalising your property agreement.
Once you have agreed on a property and financial settlement, it is important to ensure the settlement (whether by a Financial Agreement or Court orders) is binding for each person. To be binding, you and your ex-partner or spouse sign a document, which records the agreed settlement either as:
- A Consent Order that is then lodged and approved by the Family Court; or
- A Binding Financial Agreement.
If you document your property settlement in any other way, such as by signing a letter or statutory declaration, your agreement will not be considered legally binding, and you may not be able to enforce the terms of the agreement.
It is not uncommon for parties to make claims against their ex-spouse many years after separation (and even divorce). Perhaps the most important issue in any Family Law property settlement is to ensure that you obtain the right advice so you can make informed decisions.
If you are considering property settlements and would like a legal perspective, our accredited family law specialists can assist you in achieving a cost-effective and efficient resolution. Please click here to contact us by phone or email.
Would you like to know more?Contact our family law team on 1300 424 452 to receive personalised advice about your case.