Making a property settlement without the help of a court is possible.
In order to complete a property settlement without the help of the court system, there are a variety of tools accessible to you. You should, however, obtain legal advice from our team of Family Lawyers and Mediators at Mediations Australia to assist you with the preparation of your property settlement agreement due to the complicated nature of such an arrangement.
You will save both time and money if you are able to reach an agreement without having to have the Court intervene. Additionally, you may be able to better your relationship with your former spouse, which may aid in the resolution of any future issues.
If you and your former spouse have reached an agreement on the terms of a property settlement, you should finalise the arrangement by filing an application with the court for a consent order or entering into a financial agreement.
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Agreements on financial matters
In that it specifies how property will be shared between the parties, a financial agreement is comparable to a contract. Those involved in a married or de facto relationship are permitted by the Family Law Act 1975 (Cth) to enter into a legally enforceable financial arrangement. It is possible to make a financial agreement either before to or during a relationship. These agreements are commonly referred to as prenuptial agreements.
If you decide to get into a financial arrangement, you must make certain that you fully comprehend the conditions of the agreement. Before entering into any arrangement, each party should get separate legal and financial advice from a qualified professional. If the formal criteria of the agreement are not satisfied, the agreement will be deemed illegitimate, and the court may order its termination.
Orders of consent
It is possible to reach an agreement on a property settlement between you and your ex-partner by creating a formal agreement in the form of a consent order and then requesting permission from a court of competent jurisdiction. Similar to the way a contract works, when you sign the agreement, you are stating that you agree to the conditions laid forth in the document. This is similar to how a lease works. Once the order has been approved by the court, it becomes legally binding.
It is also possible to seek for a consent order without having to appear in court.
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Property settlements imposed by the court.
You can file an application with the court to have a court order made on behalf of you and your former partner if you are unable to achieve an agreement outside of court. A court will only issue an order if it is fair and reasonable to modify the property interests of the parties involved in the case.
According to the Family Courts, a four-step method is used to evaluate how much each party is likely to get from the relationship asset pool in the event of a divorce.
In most cases, property settlement talks are done in percentage terms, with the percentages changing as the process goes through the four rounds of the procedure. If you are going through a divorce, this four-step procedure will help you decide what the courts would regard to be a “fair and equitable” allocation of your assets in the case of a divorce.
Consequently, let’s begin with the first step:
Can you tell me about the assets that you have in your asset pool?
Your asset pool, which is made of the following things, acts as the foundation for all property settlement agreements. It is important to understand how your asset pool works.
The value of money, whether it is held in joint names, in your own name, or on behalf of another person, such as a child;
Obligations – once again, your liabilities are included in the asset pool, regardless of whether the liability is held in your name or not; and, once again, your liabilities are included in the asset pool.
As a result of recent legislative changes, the status of non-vested superannuation in the context of a property settlement has altered significantly. Non-vested superannuation is now recognised as “property,” rather than as a retirement benefit.
It is the most basic and reliable technique of calculating your joint asset pool after a divorce is to go through the process of financial disclosure, in which both parties share financial paperwork. It is possible to provide documents in the form of bank statements, tax returns, and appraisals, among other things.
Disclosing information concerning your or your spouse’s property interests, as well as your or your spouse’s individual earnings, financial resources, and trust ties, are all acceptable forms of disclosure.
In accordance with the Family Law Rules of 2004, it is required to give a complete and candid disclosure of all relevant facts (Chapter 13). You or your legal advisor should be able to identify your spouse’s direct and indirect financial conditions as soon as you or your legal counsel gets the disclosure.
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How did you get your hands on it in the first place?
Another way of putting it, how did you add to your asset pool during the length of your marriage? A factor that will be taken into consideration by the court is whether you and your spouse have made financial or non-financial contributions to the purchase, improvement, and conservation of your property, as well as the welfare of your family. A property settlement is often viewed in the same manner as a monetary contribution made throughout the course of a relationship, and both financial and non-financial contributions might be given the same amount of respect.
This means that the majority of your financial contributions to your asset pool will come from your income and the way in which it was utilised during the length of the partnership. Your financial contributions, on the other hand, may include gifts or inheritances received during the course of the relationship, as well as cash donations made during the relationship. An enquiry must be carried out in order to ascertain how these monies were spent and whether or not they are still existing in your asset pool at the time of the discovery.
It is equally crucial to make non-financial contributions during the course of the relationship as it is to make money ones. Making contributions in a variety of ways is possible, including providing care for a kid or children, cooking and cleaning, and overseeing financial matters for the home. It is usual for one person to take on these obligations so that the other person may work and contribute financially to the family, despite the fact that non-financial contributions cannot be ascribed a monetary value inside your asset pool. Therefore, in a property settlement, non-financial contributions are accorded the same weight as monetary ones.
What are your hopes and aspirations for the foreseeable future?
A divorce will almost certainly result in one of the parties having more financial requirements in the future than will the other. There are a variety of elements that might impact your future demands, including your health, your age, who is responsible for primary care of a kid or children, and your income, among others. According to Section 75 (2) of the Family Law Act 1975, a full list of the reasons that the court must take into account while evaluating future obligations is set out in detail.
Consider the following two real-life scenarios:
Following the separation, there are two children under the age of twelve who will very certainly remain in the primary custody of their mother following the divorce. This will place the mother in a position of primary caretaker for her children, which may limit her capacity to work and provide a living for herself and her children. This will be taken into consideration by the court as a possible future requirement of the mother.
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The husband is a lawyer who works full-time and makes roughly $160,000 per year, while the wife is a nurse who works full-time and earns approximately $70,000 per year. Most likely, the court will come to the decision that the Wife’s income is the most valuable asset she may take from the marriage.
The court’s discretion will ultimately determine whether or not you have a future need and how that need should be met as part of your property settlement.
The allocation of resources is fair, according to question 4.
It is the legal phrase “just and equitable” that is used to characterise the scenario. In practical terms, and following the completion of stages 1 through 3, this means: The allocation of the asset pool, which includes obligations and superannuation, is equal in all respects. Is the asset pool distributed in an equal manner, to put it differently?
When it comes to divorce and child custody, what you or your spouse deems “fair” is not often what the court considers “just and equitable.” Many people believe that dividing your asset pool 50/50 is a fair distribution of your money. This is a frequent misconception. If you are getting married or entering into a civil partnership, the court has a responsibility to guarantee that the financial and non-financial contributions made by both parties are taken into consideration, as well as their future requirements in the framework of your marriage or civil partnership. Due to the fact that the court will take all of these elements into consideration in the context of your specific relationship, the court will make any necessary modifications, resulting in divisions such as 55/45 or 60/40, for example.
Although the 4-step procedure is rather straightforward, as is true of most things in family law, it is not without its flaws, and your final conclusion will be decided by the individual circumstances of your partnership. It is vital that you receive independent legal counsel as soon as possible after your divorce has been finalised in order to prevent being misled during the property settlement talks. When clients come to our office a few months or even years after their divorce, they often bring in what we call a “dogs breakfast,” which they have constructed because they did not obtain even the most basic legal guidance while they were still married to one other, we are sometimes surprised.
Before engaging in any property settlement talks, it is advised that you have at the very least a basic grasp of your claim after going through the 4-step procedure with your legal counsel. Following that, your legal adviser should be able to give you with choices for completing your property settlement in the most expedient and cost-effective manner possible.
What Should You Do Now?
At Mediations Australia, we have a team of family lawyers and mediators who can assist you in Sydney, Perth, Adelaide, Melbourne and all other locations in Australia. We also do international family law matters.