Separation, Divorce and Property Settlement
When two parties in an exclusive relationship decide to end the relationship and go on their own ways, either through separation (for de facto relationships) or divorce (for married couples who have separated for at least 12 months), it is common for the parties to sort out how to divide their assets and debts.
As there is no formal legal process for setting up a de facto relationship, a separation would be much simpler as compared to a divorce, which is a legal process on its own. The parties would then proceed to determine formal division of their property, which can be done in one of three ways:
An agreement between you and your former spouse or de facto partner sets out how your property should be divided without the involvement of the court – this normally involves an agreement in writing;
You can formalise an agreement by applying to the Family Court for consent orders; or
If an agreement cannot be made, you can apply to the court for financial orders, including orders for property division and payment of spouse or de facto partner support.
How Does the Court Determine Division of Assets and Debts?
As every relationship is different and unique in its own circumstance, there is no objective standard for deciding how to divide property. Each party presents his/her own case supported by evidence, and the judicial officer will decide based on what is just and equitable. The Family Law Act 1975 sets out the general principles for the court to decide financial disputes after the end of a relationship, which includes factoring in the following:
What does a party own (i.e. assets) and owe (i.e. debts), and how much are these assets and debts respectively;
What is each party’s financial contributions to the marriage or de factor relationship (e.g. wages);
What is each party’s indirect financial contributions (e.g. gifts, inheritances, etc);
What is each party’s non-financial contributions such as homemaking responsibilities and caring for children;
What is required for future maintenance (e.g. a spouse/partner with custody of a child would require child support, or a party who previously gave up his/her career to support the other may require spousal/partner support once separated or divorced); the court will take into account age, health, finance, care of children and ability to upskill.
Time Limit for Application for Property Adjustment
If you would like to apply to the court for property adjustment, you should be aware of the time limits imposed. For previously married parties, applications to the court must be made within 12 months of your divorce becoming finalised. For parties previously in a de facto relationship, applications must be made within 2 years of the breakdown of the relationship.
If you apply outside the above time limits, you would require special permission from the court, which may not always be granted.