What am I entitled to in a separation?
The most important questions you need to answer when you are separating from your partner are;
- what am I entitled to in a separation;
- how the assets will divide;
- what is the percentage of division?
In Australia when a couple separates, there can be a misunderstanding of entitlements when it comes to liabilities and assets including loans, bitcoins, mortgages, and shares. The most prevalent misunderstandings are that assets that are not owned jointly will not be part of the asset pool for division and that all assets will be divided equally.
So, if you are recently divorced or separated and want to know the answer to these questions continue reading. In this article, we are going to discuss the concerns related to a settlement when a couple are separating. We will also who is entitled to what, how the assets are settled and how you can potentially obtain more from a property settlement.
According to law, what am I entitled to in a separation in Australia?
A defined or fixed formula is not used for the determination of assets and liabilities division. The settlement and division vary from case to case and it is not fixed. It is done according to the individual facts of each family law matter and an unbiassed division is performed based on unique circumstances and references. Also, there is no predefined determination about how much property pool you will be given by the court. There is no such thing as a 50/50 automatic split.
To find out more about your question, “what am I entitled to in a separation in Australia” read these five steps taken by the family court when considering your property settlement. The family law courts in Australia apply this 5 step approach when assessing what you are entitled to in divorce settlement or de facto separation.
#1. What defines the property pool
The court will define the property pool by collecting the list of properties and liabilities. A property pool is a collection of all the assets, properties, liabilities whether owned jointly or solely by both partners. For instance, assets include houses, blocks of land, investments, bitcoin, bank accounts, businesses, any vehicle or conveyance, and shares. And liabilities include all types of loans, bank ATM cards, etc. If a partner sells an asset from the pool, it will add back into the property pool as long as such asset can be adequately traced. That is why it is better to get the property settlement done near the time of separation to minimize the risk of assets going missing.
#2. Find out the contribution of each partner in the property pool
After the determination of the property pool, the court finds out the financial contributions of both partners to the property pool. The contributions that both the parties made to the purchase and maintenance of the property. The contributions are of three types; assets owned by both partners before the relationship and the property, liabilities bought during the relationship, and the contributions from both partners after the relationship that is each party has paid since the separation date including loan repayments, credit payments, etc. This does not mean that if one party to the relationship has not been a breadwinner they will get less.
#3. Analyze whether the property settlement should be made or not?
The court then proceeds to find whether it is equitable to divide the property. There may be cases, albeit limited, where there is no need to divide the property pool.
#4. Determine whether it is important to issue orders for future needs?
Then comes the next step in which the court gauges the need for future adjustment for one or both parties. The adjustment for future needs includes the income of both parties, age, earning capacity, health, and brought up of child/children. If the court assesses that the health, age, and earnings are the same for both partners and they are at the same level, the adjustment orders for future needs are not issued.
#5. Measure the practicality of proposed property settlement
The last step is to measure the practical nature of the proposed property settlement. The court decides whether it is fair and just for that specific property settlement to occur. Moreover, a divorce lawyer can assist you in answering your question, “what am I entitled to in a separation in Australia “better than this article can. Every case is unique.
How to perform an equitable calculation for property settlement?
Here are some steps you can take in preparing your family lawyer for an initial consultation.
- List all the assets and liabilities
- Determine the contributions of both parties
- The length of the relationship
- Subtract the liabilities to determine the total property pool
- Determine the future needs of you and your former partner
Based on these steps you can obtain a rough percentage of a property settlement.
Time and requirements for the application of settlement
According to the Family Law Act in Australia, the property settlement approach in both marriage and de facto relationship is quite similar. Though there are some significant differences such as a time limit for the application process. The time to make an application for a property settlement is 1 year in the case of marriage separation. Once the divorce agreement is finalised, you need to submit your application for a property settlement within a year after the divorce.
On the other hand, you have a time limit of 2 years if you were in a de facto relationship. After the end of the relationship, you can apply for the settlement within two years. Moreover, in the case of a de facto relationship, the court proceeds on the property settlement if you satisfy the court with one of the following:
- Your relationship span was two or more years.
- You gave birth to your partner’s child during the relationship.
- You put significant contributions and support your partner through thick and thin, but the relationship failed due to the conduct of your partner or he/she cheating on you.
- A legal record of your relationship is available or it was registered under the law of the state.
What is the rule of asset division or property settlement?
As stated previously, there is a very common misconception among people that the property and liabilities are divided among both parties by the so-called mythical 50-50 rule. In other words, the property pool is divided into two halves and both parties separate with 50% each of the pool. The court itself decides the property settlement after assessing all relevant factors, following which the court issues an order that finalizes the settlement.
The most important thing you can do prior to or following separation regardless of whether you were married or in a de facto relationship is to seek legal advice.
What Should You Do Now?
At Mediations Australia, we have a team of family lawyers and mediators who can assist you in Canberra, Perth, Adelaide, Melbourne and all other locations in Australia. We also do international family law matters.
