Divorce property settlement is the process in which two separating parties come to an agreement about how to divide their assets and property.
Understanding Divorce Property Settlements
A divorce settlement is a formal agreement reached by a married couple outlining how they will divide their finances and assets following their divorce. It serves as the ultimate legal document establishing the terms of their divorce. There are a variety of emotional and financial challenges that can arise when dividing assets during a divorce. Understanding your rights and obligations during divorce proceedings is essential to ensuring your property settlement is fair.
What Constitutes “Property” in a Divorce
The assessment of your relationship’s property involves totaling the value of all assets and deducting the total liabilities at the point when you and your ex-partner conclude the property settlement. This collective sum is referred to as the ‘property pool.’ This includes both tangible and intangible assets, including real estate, investments, pensions, and more.
Legal Framework
The difference between separate and joint property is that separate property is held in one person’s name, whilst joint property is held by a couple.
The concept of “marital pool” assets and liabilities is a collection of all assets and debts acquired during a marriage or a de facto relationship.
The role of a pre-nuptial agreement is to determine how a couple’s property and finances will be divided if the couple separates or divorces.
Factors Influencing Property Settlements After Divorce
The key factors considered by courts during a property settlement include:Â
- The financial contributions of each spouse to the acquisition, preservation, and improvement of the property pool.
- The length of the marriage.
- The age, health, and earning capacity of each spouse.
- The care and welfare of any children involved including child support.
- Whether one spouse financially supported the other’s education or career advancement.
- Non-financial contributions (e.g., homemaker’s contributions).
Contributions
When considering contributions, the court looks at both financial and non-financial contributions. Financial contributions include the contributions of each spouse to the acquisition, preservation, and improvement of the property pool.
Non-financial contributions include the care and welfare of children and homemaking.
Duration and Nature of the Marriage
The longer the duration of a marriage, the more equal the division of assets is and less significance is placed on financial contributions at the start of the relationship.
Individual Circumstances
Courts will consider the current and future requirements when making property settlements to ensure that both parties are able to adequately provide for themselves and any dependents. They will take into account things like age, health, financial resources, care of children, and ability to earn.
Responsibilities Towards Children
Courts will also consider the responsibilities that each party has towards any children and may vary the property settlement to ensure the care and welfare of any children involved.
Supportive Contributions
Courts will consider the supportive contributions made by each party such as whether one spouse financially supported the other’s education or career advancement and can vary the property settlement accordingly.
The Process of Negotiating a Settlement
There are a number of different options within the family court process for reaching a settlement. Parties are encouraged to resolve their matters independent of court and often begin with negotiation between spouses, failing this then mediation, failing this then arbitration, and finally court litigation as a last resort.
Negotiation vs. Court Proceedings
There are a variety of advantages and disadvantages of negotiating a settlement rather than going to court.
The advantages of negotiating a settlement outside of court are that it is faster, more private, cheaper and less stressful.
The disadvantages include potentially lower compensation and one parties can escape accepting accountability and wrongdoing. However, going to court can be advantageous as you can potentially receive a higher compensation, parties can be held accountable for any wrongdoing, and it allows for your case to be fairly and impartially assessed. The disadvantages of going to court include uncertainty of an outcome, increased costs and can take a significant amount of time, all of which increase stress.Â
Seeking legal advice early in the settlement process can play a significant role in the settlement outcome. If you require assistance with this, please don’t hesitate to contact our experienced family lawyers.
Achieving a Fair Settlement
Seeking legal advice from a qualified family lawyer is critical to ensuring you receive a fair property settlement that is unique to your circumstances. Owen Hodge’s family law team can assist in identifying and valuing assets and liabilities, negotiating a fair settlement agreement, and representing you in court if necessary.
Reaching and Formalising the Settlement Agreement
Finalising and formalising the settlement agreement involves submitting an application to the Family Court, along with the proposed consent orders that outline the agreed-upon terms of the settlement agreement. The court will review the orders to ensure they are just and equitable for both parties involved before approving the agreement.
The consequences for non-compliance with Consent Orders or Financial Agreements are severe. If a party breaches a consent order or financial agreement, the other party can apply to the court for a contravention.
Takeaways
Whilst the complexities of reaching a property settlement can be daunting, seeking professional guidance for personalised advice can assist you in achieving a fair and amicable property settlement during your divorce.
Frequently asked questions
The length of the property settlement depends on the unique circumstances of your case.
Parties have 1 year from the date their divorce order comes into effect to apply for property or maintenance orders. There is no time limit on the finalization of a property settlement.
If you and your spouse cannot come to an agreement regarding a property settlement, you can apply for court orders.