Whether you are married or in a de facto relationship, the end of the relationship usually signals a time when you and your spouse will need to decide how to divide your assets and debts.
Family law provides an all-inclusive process to determine the division of property, based on whether it’s just and equitable in all of the circumstances to alter the parties’ property interests (i.e. ‘is it fair?’).
In considering if it’s ‘fair’, the law looks at:
- What are each person’s assets and liabilities? Assets include the family home, cars, bank accounts, shares, business interests and superannuation. Liabilities include the mortgage, car finance, personal loans, credit cards and taxation debts.
- How long was the relationship? What contributions did each person make? Contributions can be financial, such as a deposit on the family home, mortgage payments or an inheritance. Contributions can also be non-financial, such as parenting and homemaking.
- What are each party’s future needs regarding their age, health, child-care responsibility and income-earning capacity?
Timing is important. Although there are some exceptions, generally speaking, property settlement must be done:
- Within 12 months of being divorced (if you separated a long time ago but have never gotten a divorce, you may still be entitled to a property settlement).
- Within 2 years of separating from a de facto relationship.
By all means, work out your property settlement with your spouse informally. After you’ve reached agreement, it is best to legally formalise your settlement.
- Unless your agreement is formalised, you run the risk of having a claim made by your spouse further down the track.
- Transfer of the family home into one spouse’s name is usually exempt from stamp duty.
An experienced family lawyer can advise of your likely property settlement entitlements and can formalise your settlement through Consent Orders or a Financial Agreement.