Some people are tempted to just end a relationship without raising the issue of financial settlement. However it is absolutely vital that you make arrangements to finalise your joint property interests for several reasons:
- You only have one year from the date of divorce or two years from the date of separation in a de facto relationship to have the court assist with your property settlement.
- If you do not sever your liabilities, you will remain jointly responsible for them even if your ex accumulates credit card debt on their own.
- Similarly, if you do not sever your interest in your assets, you will both have ownership even if you pay off the mortgage on your own.
- Most importantly, if you have children you need to consider what their, and your, future needs are going to be and make sure that they are provided for.
The Family Law Act 1975 (Cth) is the legislation which covers parenting and property disputes across Australia, for divorce and de facto settlements, and outlines how court would decide a property dispute. It is commonly referred to as the four step process the property pool is identified, contributions made by each party are considered, both party's future needs are looked at and then the court considers whether the proposed outcome is just and equitable. The division of property can vary significantly depending on the intricacies of your case so it is important to obtain proper legal advice before finalising a settlement.
The first step in reaching an agreement is to attempt negotiation with your former partner. You can negotiate verbally or in writing and you are able to negotiate without a lawyer or through a legal representative. It is important that you understand what your joint financial position is before you start negotiating. It is also useful to know what your legal entitlements are and how the court would apply the law to your circumstances. Obtaining legal advice before you start negotiating, and definitely before you reach any agreement, is crucial to ensure that you receive what you are entitled to.
If simply negotiating with your former partner isn't possible then you can attempt mediation or participate in arbitration. For either option, both parties must consent to participate and the costs of the process are often shared. Mediation is used to guide the parties to reach their own agreement.
Arbitration is the process of both parties presenting their case to an arbitrator who then delivers a decision and the parties agree to turn that decision into a formal agreement.
If you are unable to successfully negotiate, mediate or arbitrate, court may be the only option for you. Going to court may sound daunting but it does not have to be a complicated and difficult process. Even if you begin proceedings in court, you are still able to reach an agreement with your former partner at any stage of the court process.
To start the court process, you must file the initiating documents in the Federal Circuit Court. The court will give you a court date and you will have the opportunity to present your case to a Judge. Unfortunately, your matter will not be resolved in one court appearance (unless you can reach an agreement). The process can be quite lengthy and involve several court dates before you can proceed to trial.
The court will usually require that both parties participate in mediation or a conciliation conference before you receive a trial date. Both parties will also be required to make full disclosure of their financial documents to the other in order to ensure that settlement that is reached or ordered is a fair one. Neither party is permitted to dispose or alter any joint financial interests until the matter is resolved. If you need to receive funds from your joint finances prior to the case resolving, you are able to make an application for interim property division at any stage of the process.
You can reach an agreement between yourselves or you can involve lawyers to assist. If you reach an agreement in relation to financial settlement, you should finalise it in a legal way. You have two options to do this making an Application for Consent Orders to the court or executing a Binding Financial Agreement. For Consent Orders, it is in your best interests to receive legal advice before signing, however it is not required. You will need to draft the relevant documents and send them to the court where they will be finalised. A Binding Financial Agreement is usually drafted by a lawyer given the complicated nature of such agreements and both parties must obtain independent legal advice.
