When it comes to the division of assets and liabilities during a separation or divorce, the 4 step property settlement process is a fundamental framework used by Australian family courts to achieve a just and reasonable distribution. This process aims to ascertain each party’s financial circumstances, contributions, and future needs to arrive at a fair and balanced settlement.
Whether you are just beginning the property settlement process or require assistance at any stage, our experienced team of property lawyers is here to support you. If you have any questions, please reach out to our law firm for personalised legal advice.
What is property settlement in Australia?
When a relationship ends, whether it’s a marriage or a de-facto relationship, the property must be divided between yourself and your partner. Property settlement involves various legal and financial tasks, which can be navigated by the help of an experienced lawyer.
How to apply for property settlement
You may apply for an order for property settlement to the Family Court of Australia or Federal Magistrates Court at any time. In family law the Family Law Act 1975 (the Act), stipulates a strict time restriction of 12 months after divorce for married couples to apply for property settlements.
It is advantageous for you to try and reach an greement with your ex-partner regarding division of your assets.
The court requires the separating couples to make a genuine effort to reach an agreement between them, before commencing with any court proceedings.
If at all the process fails to result in resolution, then you may commence court proceedings for a court determination as to property settlement.
You may apply to a court for financial orders, including orders relating to the division of property and payment for your ex-partner’s maintenance.
We always recommend consulting with a property lawyer in these situations.
The 4 step property settlement process
The 4 step property settlement process in NSW is adopted by the court in order to assess property settlements. It consists of the following steps:
Step 1: Establishing net asset pool and valuation of assets
All assets are taken into account, irrespective of whether they are acquired before or during the marriage or after the separation. Property includes almost everything of value such as real estate, shares, cars, jewellery, savings, furniture and many more.
Step 2: Contributions towards the net asset pool
The second step is to calculate the partners’ contribution towards the marriage or de facto relationship. This includes both financial and non-financial contributions, as well as the contribution made as a homemaker or parent. Initial contributions are also considered such as gifts, inheritances and money received during the course of the marriage or de facto relationship.
Step 3: Future needs & adjustments
The third step is to calculate the future needs. This takes into account a range of things such as age, health, income earning capacity, properties, care and support of the children and financial circumstances of any new relationship.
During this stage, the court also considers whether any adjustments should be made for the future needs of the partners.
Step 4: Practical effect
The fourth step is to consider the practical effect on the proposed property settlement and also to achieve the same in a just and equitable manner.
Both partners have clear obligations to make full and honest disclosure about their respective financial circumstances. A failure to make such can have very serious consequences.
Whether or not the agreement can be reached, the rules governing the division of assets are complex, and you should seek legal advice before making a final decision. Our expert Sydney-based property lawyers at Owen Hodge Lawyers are always ready to help you in this regard and will endeavour to help you in achieving the best possible results.
Turn to the property lawyers at Owen Hodge
Whether or not the agreement can be reached, the rules governing the division of assets are complex, and you should seek legal advice before making a final decision. Our expert Sydney-based property lawyers at Owen Hodge Lawyers are always ready to help you in this regard and will endeavour to help you in achieving the best possible results. If you have any other enquiries, please don’t hesitate to contact our experienced conveyancing lawyers online today.
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Property settlement: FAQs
If you have elected for an online settlement through a digital platform like PEXA, sale proceeds will typically be available in your nominated account on the same day. If your settlement is in person, you will need to wait for the bank cheques or transfer to clear, which depending on your bank, can take up to seven to nine business days.
The length of the divorce property settlement in Australia will all depend on the complexity of the case. However, the general time limit is between 30 and 90 days.
Property Settlement Lawyers
Frequently asked questions
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