Key Practice Areas
What Happens to Your Grandchildren?
It is a sad reality that children are significant casualties of parental separation. It’s hard enough when the separation is amicable. A child’s feelings of stability are undermined and the concepts of love and nurture no longer provide protection from external forces. Everything changes.
Navigating a Property Settlement
The Family Law Act 1975 (“the Act“) and case law sets out the basis for determining how the division of assets between spouses occurs. Understanding the considerations of how a just and equitable property settlement is determined, what circumstances provide for maintenance of a party, and what time limitations exist are of critical importance.
How to Prepare for a Property Settlement
Generally speaking, the first step to effectively preparing a property settlement is to locate and exchange disclosure documents. A “disclosure document” is any document which evidences a party’s financial circumstance and can include things such as bank statements, tax returns, rates notices, registration certificates, divided statements, superannuation statements, company documents and so on. The purpose of disclosure is to ensure that both parties are aware of the financial circumstances of the other party before entering into an agreement about the division of the assets.
In some circumstances it is not possible to obtain and exchange disclosure documents before beginning your negotiations. These occasions are rare and are generally limited to circumstances where there is an urgent need for maintenance. You should speak with a solicitor at the earliest possible stage to ascertain whether your circumstances fit the legal criteria for an urgent maintenance claim.
Effectively Negotiating a Property Settlement
From a client’s point of view, obtaining a basic understanding of the legal concepts which will impact upon the outcome of their property settlement is important. Preliminary advice is often key to ensuring that you are well prepared for each “stage” of a property settlement. It is also essential that you are able to effectively communicate with your solicitor as they can be your greatest tool to achieving the best outcome possible for you.
From a legal point of view, current Australian family law requires consideration to be given to the following factors:
- Whether it is just and equitable for the court to make orders in that particular matter; if it is not, the matter does not proceed further. However if it is, consideration is then given to the following matters.
- What are the assets, liabilities and financial resources of the parties. In some cases, especially those where there has been a significant delay between separation and a property settlement being achieved, consideration will also need to be given to assets, liabilities and financial resources which no longer exist but which did exist at some stage prior to the negotiations or court proceedings.
- What were the parties respective contributions to the relationship. This includes a consideration of both financial and non-financial contributions such as income, gifts, inheritances, compensation payouts, who cared for the child/ren, who attended to the household tasks such as cooking, cleaning and maintenance of any real properties.
- What the parties future needs are. This includes comparing things such as the parties’ ages, their earning capacities, health, and the arrangements for any minor children.
It is worthwhile to note that Binding Financial Agreements can assist with these potential issues if they are prepared before the relationship commences or during the relationship, irrespective of whether the relationship is that of a marriage or de facto nature. Binding Financial Agreements are commonly referred to as “pre-nuptial agreements”, albeit that term does not actually exist within the Act.
Do We Have “Alimony” in Australia?
It is a common misconception based on American movies and television shows that we have “alimony” in Australia. In Australia, however we do not have alimony, instead we have “spousal maintenance”. Spousal maintenance can occur in either married or de facto relationships and is a financial payment made by one party to the other party after separation in either periodic or lump sum payments.
Spousal maintenance claims are less common today than they were when the Act commenced. This is because the majority of people will (sensibly) implement an arrangement after separation which enables them to meet their joint expenses pending the final resolution of their property matters, notwithstanding that they now have two households which they have to meet the costs of. Where parties are not able to reach agreement on these issues, the Act sets out the basis on which a maintenance claim can be made.
This essentially involves a consideration of the needs of the party claiming maintenance by examining what expenses they are seeking and comparing that with what capacity the other party has to meet those costs by examining that party’s own expenses. Early independent legal advice is essential to determining whether such a claim should be pursued or not.
What About Shorter Marriages & De Facto Relationships?
In circumstances where the relationship is short, it is common that a closer examination of the direct financial contributions of the parties will occur, particularly when there are no children of the relationship. As the law currently stands, even if one partner may have made all the contributions in a short marriage there is no fixed adjustment for the contributions, and the outcome will still depend on the circumstances of the marriage/de facto relationship.
What Time Limitations Exist for a Property Settlement to Take Place?
In married relationships, the parties have 12 months from the date of their divorce to commence proceedings. In de facto relationships the parties have two years from the date of separation to finalise their property and maintenance matters.
Though this sounds good for some parties, where they might choose to wait and hope any potential risk of a claim goes away, this is not always the case. Additionally, even if a number of years have lapsed following a divorce or de facto time limitation expiring, a former spouse/de facto who is suffering financial hardship can apply for leave of the Court to lodge a claim out of time.
It is not unheard of for a former partner to lodge a property application many years after the fact. This can result in significant distress for the party who has to respond to such an application, particularly when the recipient of the claim has started a new life with a new partner. To address this risk, it is advisable for a property settlement to be formalised to prevent future applications down the track.
We strongly advise that all clients experiencing a separation obtain legal advice as soon as possible. By doing so they can be advised of the most cost effective steps to formalise any agreement reached or to litigate the matter if the circumstances require. This then enables parties to move on with their lives, with the greatest certainty that the law allows.
Additionally it is strongly recommended that individuals obtain legal advice early on in their relationships to ensure that property settlement disputes do not become a larger issue later on should separation, however unlikely, occur.
How We Can Help
Quinn & Scattini Lawyers are highly experienced with all types of property settlement matters. If you are not sure about what your likely entitlements may be in an upcoming property settlement, or would like clarification on your rights and responsibilities, make sure you consult an experienced family lawyer who practises exclusively in this complex area of law.
Our expert family lawyers are available at any of our local offices.