Property settlement agreements are intended to finalise the financial relationship of parties to a relationship or a marriage and can cover a wide range of property including:
– The former matrimonial home;
– The investment properties and share holding;
– Companies, businesses and trusts;
– Spousal maintneance;
– Child support;
Who can apply for a property settlement agreements?
Parties who are married are able to make an application to the Court to seek a determination about whether there should be a division of property and in what form. De facto partners who separated after 1 March 2009 are also eligible to make an Application to the Family Court of Federal Circuit Court for a property settlement. It is also possible for de facto partners who separated before 1 March 2009 to agree to have their property division determined under the provisions of the Family Law Act 1975.
How does a Court divide property?
Our goal is to help you achieve the best property settlement without recourse to litigation. However, it assists to have an understanding of the manner in which the Court approaches property matters, and considerations a Judge must undertake when determining whether to make Orders with respect to parties’ interests in property. This same approach is utilised by lawyers when attempting to negotiate a fair and appropriate property settlement.
The summary below sets out, albeit briefly, the guidelines relevant to the Court’s consideration of property matters, although each case will be determined having regard to its specific set of circumstances.
Recent case law has developed the process by which a Court determines whether Orders adjusting parties’ interest in property are appropriate and have emphasised the need to consider throughout the entire process the question as to whether a property division be ‘just and equable’ in the circumstances. The first step therefore in a property settlement exercise is to identify, according to ordinary common law and equitable principles, the existing legal and equable interests of the parties in their property.
The second steps involves ascertaining whether it is just and equitable for the Court to make Orders which alters the existing interests of the party in their property. Importantly, in most cases where the parties have separated and are no longer living in a marital relationship, the assumption that the parties had the ability to adjust ownership arrangements of their own property via agreement between them no longer applies. This fact in many cases will ordinarily persuade the Court that it is just and equitable to make Orders altering the parties’ interests in their existing property.
After the Court has concluded that it is just and equitable to make orders effecting the parties’ property, the Court should then proceed to have regard to assess the extent of each parties’ contributions to the acquisition, conservation and maintenance of the assets which exist at the time of separation, and at the time of trial. There are three different recognised forms of contribution, mainly:
1. Direct financial contributions. An example would be income earned by the parties during the relationship, or if one party came into the relationship with significant interest in property;
2. Indirect financial contributions. An example of this type of contribution would be if one or both parties undertook renovations or maintenance of a property which resulted in an increase in the capital value of the real estate; and
3. Non-financial contributions. This type of contribution includes those made by a party to the welfare of the family and are also known as domestic contributions. Parties who are the primary homemaker, and primary careers of children, and who otherwise undertake domestic responsibilities are credited with this type of contribution.
Thereafter, the Court must consider the financial resources, means and needs of the parties including but not limited to:
1. The effect of any proposed Orders on the earning capacity of either party;
2. The age and health of each party;
3. Each parties prospects of future gainful employment and income and earning capacity; and
4. Whether each party has an obligation to support a child of the marriage or relationship, or has other dependents.
Having considered the above, and again subject at all times to the Court being satisfied that the property division is just and equitable in all of the circumstances, the Court can proceed to make Orders adjusting the parties’ interests in property and finalising the property settlement.
It is not necessary to wait until you are divorced to commence an application for property settlement, or to entertain a negotiated resolution. Rather, arrangements to finalise all property matters can be made at any time. It is important to be aware however that in the event you obtain a divorce from the Federal Circuit Court, an application seeking Orders for the division of property must be made within 12 months of the divorce becoming absolute, or at a later time with leave of the Court.
We are committed to ensuring you receive the best possible financial settlement, whether by way of a commercially sensible negotiated resolution, or when necessary through litigation. Contact us to obtain more information or to arrange an appointment with our office.