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August 15, 2016
Divorce and the Division of Property

The moment two people realise their relationship is over and decide to separate or divorce is one of the most emotionally charged experiences anyone can go through in life.

And while it’s understandable that you and your former de facto partner or spouse may want to rush this difficult process, it is important you make level-headed decisions when dividing your finances and material assets or property.

There are various ways to go about doing this:

You and your former partner can negotiate an amicable solution as to how you divide your property without any court involvement

You can apply for consent orders in the Family Court to formalise any agreement you come to with your former partner, or

You can file an application for property and/or financial orders in the Family Court if you and your former spouse or de facto partner cannot agree.

What Are the Pros and Cons?

Coming to a mutual arrangement in which both parties will be happy is preferable from the point of view that it would lessen the emotional and financial cost of legal proceedings.

In addition, resolving things amicably allows for the possibility of maintaining healthy, continuing relationships as parents (if you have children).

But why have your agreement formalised in Family Court? So that you and your former spouse of de facto partner will have the peace of mind that comes with knowing your assets will be divided exactly as agreed.

Alternatively, if you do need to go to court to find a resolution, just know that there is no one formula for deciding who gets what.

General principles of the Family Law Act 1975

When deciding on financial disputes, the courts observe a number of general principles as set out by the Family Law Act 1975.

These principles apply to all couples regardless of whether two parties were in a marriage or de facto relationship.

A judicial officer will base their decision on what deemed is fair and equitable after all relevant evidence is considered. The determining factors include:

The value of your individual assets and debts and what they’re worth

What direct financial contributions were made to the relationship by each party (wages, salary, etc.)

What indirect contributions were made to the relationship by each party (gifts, inheritances, etc.)

What non-financial contributions were made to the relationship such as child raising, homemaking, etc., and

Other external factors like age, health, the ability to care for children and the future earning potential of each party.

As a result, any decision handed down will be based on your family’s unique set of circumstances. This makes it difficult to predict a likely result.

Going through this process may put increased pressure upon you and your family and it is advisable you seek legal advice before engaging with and taking the matter to court.

Time Limits on Applications

In Australia, the courts observe two specified deadlines as they relate to:

Spouses exiting a marriage: Applications must be submitted within 12 months of the date the divorce is made final, and

Partners exiting a de facto relationship: Applications must be made within 24 months of the dissolution of the relationship

If an application is not received during these time limits, you will need the express permission of a court — something which is not always granted.

More Than Just About Material Possessions

While the courts may be deal in allocating blame and recompense, there is much more to separation and divorce. Aside from being confronted by a profound level of grief, couples are thrust into a daunting period of uncertainty that brings with it a number of troubling questions.

Questions about where people will be living, what impact it would have on the kids if they were to change schools, juggling finances, what the current job market is like and when life will begin getting back to normal.

If you are struggling with any familial or relationship issues and would like more information about how you may proceed, contact Sue Holgate, Partner on sholgate@lbandh.com.au.