Family Law Property and Financial Disputes

separationAfter you separate one of the first things you will need to address is how you will allocate and divide the property you have accumulated that is ‘property of the marriage’ and just as importantly, the ongoing bills and financial obligations you share.

It can be difficult discussing and reaching agreement about household finances when you are still together – it can be even more difficult to take practical, proactive steps in your own interests after you separate (or leading up to a separation). Don’t put it off – ask JV Legal for some advice on how to approach and resolve this.

We can assist you to understand your potential rights, obligations and entitlements in approaching family law property settlement and can approach your former partner (or their solicitor) on your behalf and open settlement negotiations. 

If your marriage has broken down and you are separated or you have been living in a de facto relationship which broke down on or after1 March 2009- the law is essentially the same.

You must exchange financial disclosure documents such as tax returns, super statements and bank statements with your former spouse.

We encourage and endeavour to assist you to reach an early settlement with your former spouse and avoid going to Court. If you reach agreement, we can assist you in making the agreement formal and enforceable by way of consent orders or a Financial Agreement.

In many cases negotiations by correspondence are successful. But if not, then we can assist in arranging mediation or you may chose to apply to the Court for a determination of the division of property.

Settlement negotiations can take place at any time before or after Court proceedings commence. The Court encourages parties to try and reach agreement between themselves and provides a number of structured, professionally assisted opportunities for parties to try and reach agreement without resorting to a full hearing.

In considering any property settlement we advise you about and the 4 step process which the Court considers and applies (in the event that you can not agree):

Step 1 – Identifying the nett pool of property to be divided

Put simply, the value of the assets of the relationship less the liabilities.

Sometimes funds or assets that may have been spent or disposed of or sold are ‘added back’ – but this is not a standard approach. This includes superannuation. Some matters are straightforward others are more complicated. Sometimes parties can not agree on, for instance, the value of a house or investment property and a valuation in required.

Step 2 – Contributions

Property settlement is generally approached by identifying and weighing up what contribution each party has made in the course of the relationship and then allocating a percentage to it.  

The idea of what is a ‘contribution’ is broad and takes into account financial, non-financial and homemaker/parent contributions. Importantly there is no rule that says one kind of contribution is more important overall than another.

Some of the relevant considerations at this step are the length of the relationship, the roles of the respective parties and responsibilities in respect of caring for children, whether either party owned any assets before the marriage/relationship commenced, whether either party received any inheritances or other “windfalls” during the marriage/relationship and the circumstances for the parties and their children since separation. There are no hard and fast rules when considering the weight of each party’s contributions and advice as to the range of settlement is based on experience of outcomes in other matters and applying past decisions of the Courts as compared to the particular circumstances of your matter.

Step 3 – Future Needs Assessment

Consideration is given as to whether there should be an adjustment of the contribution based percentages reached at Step 2 above or not.

There is a list of factors to be considered that are set out in the legislation (for marriages at section 75(2) and for relevant de facto relationships at section 90SF (3) of the Family Law Act 1975). Usually the most persuasive factors that result in an adjustment relate to the care of the children of the marriage/relationship, the respective earning capacities of the parties and the age and state of health of the parties.

Step 4 – Just & Equitable

The last step is not an adjustment as such – it is a check and balance procedure where the Court steps back and considers whether the proposed settlement is just and equitable in all the circumstances.

Financial Agreements

One way to resolve a property dispute is to enter into a Binding Financial Agreement. 

It is also possible to make an Agreement before marriage – commonly known as a “Pre-Nuptial Agreement”, which has the effect of regulating the division of assets, at least in part, upon separation. These types of agreements need to be drafted carefully as, particularly if they are drafted early in a relationship – when things change (like when children come along or if someone falls ill) they can be and have been found by the Court to be unenforceable.

Financial Agreements have a number of formal requirements that must be met in order to be valid and enforceable. It is necessary for both parties to obtain independent legal advice in relation to the Agreement as part of the requirement for it to be binding.

You can enter into a Financial Agreement at any time during the relationship, from when the de facto relationship or marriage is planned through to after divorce. Some different considerations apply for when the Agreement is made before, during or after the marriage.

De facto couples are now able to make similar agreements.

JV Legal can assist in either drafting an agreement for one party or providing advice on an already prepared agreement for one party. We can not advise both parties – advice must be independent. 

Please contact us for further information. You may also be interested in our article, Binding Financial Agreements – An effective Shield from a Change of Heart