Key Practice Areas
Why Formalise Property Settlement?
Monday, January 16, 2017
Formal finalisation can take the format of a Binding Financial Agreement which requires each party to obtain independent legal advice, or Consent Orders which are registered with the court and reviewed by a registrar. Each option requires disclosure to be undertaken and each party needs to be satisfied that all property, debts and superannuation have been disclosed with proper values attributed to each item.
Whilst it may seem tedious to get to this point, there are some very valid reasons why it may well be in your best interests to finalise your settlement by either of the just mentioned options.
If you are transferring a house or other item that attracts stamp duty, there is a stamp duty exemption available to a party under the Family Law Act (Cth) (“the Act“) and the Duties Act(Qld). You will still have to pay conveyancing fees and registration/processing fees , however, you will not have to pay stamp duty on the portion of property being acquired.
There may be capital gains tax roll-over relief that can be addressed. As with all taxation matters, advice from your accountant is imperative. There are further obligations in this regard where the property transaction is over $2 million dollars.
Whilst you may be separated but not divorced, for married couples, no limitation date applies. So, if you happen to win the mega-draw in lotto, it is fair game for property settlement. Whilst your former spouse may not have made a contribution to the acquisition of that win, it is still a financial resource for family law purposes and you may be required to make a payment to the other party. By not only undertaking property settlement but also obtaining a divorce, the avenues to try and claim against those monies become significantly reduced – the claiming party then has a lot of explaining to do as to why they should be allowed to make an application.
If you were in a de facto relationship, there is a limitation date of two years from the date of separation to either resolve by agreement or issue proceedings. The vulnerability of your lotto win remains live during this time. Applying after a limitation date has past requires explanation as to why you should be allowed to proceed.
Undertaking formal property settlement gives you the peace of mind in knowing that your financial ties with the other party have been finalised.
Section 81 of the Act tells us:
“In proceedings under this Part, other than proceedings under section 78 or proceedings with respect to maintenance payable during the subsistence of a marriage, the court shall, as far as practicable, make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.”
So, the only aspect that would not be finalised, once the order is made is the actual mechanics of putting the order into action.
Having finalisation of your property settlement means you no longer have to consult the other party about what colour to paint a room, whether there should be improvements or any other aspect which might increase or decrease the value of the property. It gains peace of mind.
Judgments and laws mentioned in this post:
How We Can Help
Quinn & Scattini Lawyers are highly experienced in formalising property settlements. Q&S’s expert lawyers offer compassion and understanding to our clients, as well as offering them expert advice to ensure they take steps to preserve their rights.
Our expert family lawyers are available at any of our local offices.