Property Settlement and Divorce: Key Facts You Need To Know

What is a ‘Property Settlement’:

Generally speaking, property settlement in the context of divorce refers to the division of assets and liabilities between you and your former spouse or de facto partner. This important step finalises the financial ties between you. Without severing this financial relationship, you leave yourself vulnerable to property settlement claims being made against you in the future, subject to relevant time limitations.

What is ‘Property’:

All assets (things you own) held by you and your former partner in joint or separate names such as:

• family home
• holiday home
• cars and boats
• household effects from stereos to cups and saucers
• personal items like jewellery and clothing.

All assets under your own or your former partner’s control such as:

• a business
• superannuation
• a share in an extended family business or investment property held under a family trust.

All liabilities (things that you owe money on) in joint or separate names such as:

• mortgage debts
• credit cards
• hire purchase agreements.

Note: It may also include property you held in your own name prior to entering into the relationship, or property you have acquired since separation.

Related Article: Dealing With Your Finances During A Separation

Formal methods of property settlement:

• Mutual agreement between you and your former partner on how your property should be divided formalised by applying for consent orders in the Family Court, or
• If you cannot reach an agreement, you can apply to a court for financial orders, including orders relating to the division of property and payment of spouse or de facto partner maintenance.

Why is it important to formalise property settlement?

Firstly, formalising your property settlement with your former spouse finalises your financial relationship, meaning your former partner cannot make further property settlement claims against you.

Secondly, a Consent Order and Binding Financial Agreement are legally binding, meaning if your former partner breaches the order you have recourse to the Court to enforce compliance with the agreement.

As each relationship is unique so is each divorce, seeking good legal advice early on is an unquestionable way to achieve an equitable and amicable result for you and your former partner.

Note: This is general information advice only and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters, please contact us on 03 9620 0088 or email info@resolveconflict.com.au