What You Need to Know About Property Settlement After Separation

Nearly one-third of Australian adults experience a separation or divorce in their lifetime. This means that thousands of people each year face the daunting task of dividing their shared assets. Navigating property settlement can feel overwhelming, especially when emotions are running high and the future seems uncertain.

Understanding the property settlement process can significantly ease your stress and help you achieve a fair outcome. This guide is here to break down the complexities into manageable steps, offering clear, practical advice. Whether you're at the beginning of your separation journey or already deep into negotiations, we'll provide the insights you need to move forward with confidence and clarity.

Understanding the Basics

When it comes to property settlement after separation, there are a few key things you need to know :- 

• > The Family Law Act governs the division of assets and liabilities for married and de facto couples (including same-sex couples) who have been in a relationship for at least two years.

• > The general principle is that all assets and liabilities acquired during the relationship should be divided fairly and equitably between the two parties, regardless of whose name they're in.

• > Assets and liabilities for the division include property (like the family home, investment properties, cars, etc.), superannuation, investments, and debts such as credit cards and loans.

• > The division doesn't always result in a 50/50 split. The division is instead based on what's considered fair and equitable given the unique circumstances of each case.

What are the Processes Involved in Property Settlement?

The first step in the property settlement process is to identify and value all the assets and liabilities of the relationship. This can be difficult, especially if there are complex financial arrangements or business interests involved. 

Once everything has been identified and valued, the next step is to negotiate a settlement. This can be done through informal discussions between the two parties (and their lawyers, if they have them) or through more formal processes like mediation. 

If an agreement can't be reached through negotiation or alternative dispute resolution methods, then the matter may need to be taken to court.

Factors Considered in Property Settlement

What is a "fair and equitable" division of assets and liabilities? The Family Law Act sets out a number of factors that need to be considered, including:

• > The initial financial contributions each party made at the commencement of the relationship.

• > The financial and non-financial contributions made by each party during the relationship (e.g., income, homemaker and parenting contributions)

• > The future needs of each party, taking into account things like age, health, income-earning capacity, and care of children.

• > The length of the relationship.

• > Any financial resources each party is likely to acquire in the future (e.g., anticipated inheritance, future pension entitlement, personal injury claim, etc.)

• > The effect of any proposed division on the ability of a parent to provide a suitable home for any children.

• > Any other factors the court deems relevant in the particular case.

A comprehensive evaluation is required to ensure that the settlement takes into account each relationship's unique circumstances and the future needs of both parties.

Identifying and Valuing Assets and Liabilities

One of the most complicated parts of the property settlement process can be identifying and valuing all the assets and liabilities of the relationship. It's not just about listing the obvious things like the family home, cars, and savings accounts – you also need to consider things such as:

• > Superannuation funds

• > Investments (shares, managed funds, etc.)

• > Business interests (including goodwill)

• > Trust interests

• > Personal property (e.g., jewellery, artworks, collectables)

• > Debts (credit cards, loans, mortgages)

If there are complex financial arrangements or business interests involved, it may be necessary to engage the services of a forensic accountant or business valuer to ensure everything is properly identified and valued.

Negotiating a Settlement

Once all the assets and liabilities have been identified and valued, the next step is to negotiate a settlement. This can be done through informal discussions between the two parties (and their lawyers, if they have them), or through more formal processes like mediation.

Mediation is the most common alternative dispute resolution process in family law.  It is generally less expensive and adversarial than going to court. In mediation, a neutral third party (the mediator) helps facilitate discussions and negotiations between the two parties, with the goal of reaching an agreement that both parties are satisfied with.

If an agreement can't be reached through negotiation or alternative dispute resolution methods, then the matter may need to be taken to court.

The Importance of Disclosure

One of the most important aspects of the property settlement process is full and frank disclosure of all assets and liabilities. Both parties have a legal obligation to provide complete and accurate information about their financial situation, including any assets or liabilities that may be held in trusts or other structures.

Failure to disclose assets or liabilities can have serious consequences, including potential penalties and even the possibility of the settlement being set aside in the future if the non-disclosure is discovered.

If you are going through a property settlement, it's critical that you're upfront and transparent about your financial situation from the beginning.

Seeking Professional Advice

Property settlements can be complex, and the rules and regulations can be confusing. That's why it's important to seek professional advice from a family lawyer who specialises in this area.

A good family lawyer will be able to guide you through the process, explain your rights and obligations, and help you understand the various options available to you. They can also assist with negotiating a settlement, representing you in mediation, or taking your case to court if necessary.

It's important to remember that every situation is different, and what might be a fair and equitable settlement in one case may not be in another. That's why it's so important to seek advice from a professional who can assess your unique circumstances and provide tailored advice.

Finalising the Settlement

Once an agreement has been reached, it's important to finalise the property settlement in a legally binding way. This can be done through a Binding Financial Agreement (BFA), which is a legally enforceable contract that sets out the terms of the settlement.

A BFA can be made before, during, or after a relationship, and it can cover a wide range of financial matters, including the division of assets and liabilities, spousal maintenance, and/or child support.

Alternatively, the parties can enter into consent orders with the court to finalise the terms of the property settlement or if the matter has gone to court, the court will issue orders that set out the terms of the property settlement.

Regardless of whether settlement occurs by way of a BFA or court order, it's important to ensure that the settlement is properly documented and that all necessary steps are taken to transfer ownership of assets and discharge liabilities in accordance with the agreement.

The Impact on Children

If there are children involved, their best interests must be a primary consideration in any property settlement. This means that the settlement should aim to ensure that both parents have the financial resources to provide a suitable home and standard of living for the children.

In some cases, this may mean that one parent receives a larger share of the assets or ongoing financial support (known as child support) to help cover the costs of caring for the children.

It's important to remember that the needs of children can change over time, and it may be necessary to review and adjust the property settlement arrangements as circumstances change.

Moving Forward

Going through a property settlement after separation can be an emotionally and financially challenging experience. But it's important to remember that with the right support and advice, it's possible to reach a fair and equitable outcome that allows both parties to move forward with their lives.

If you're facing a property settlement, here are a few final tips to help you through the process:

• > Seek professional advice from a family lawyer who specialises in property settlements. They can help you understand your rights and obligations and guide you through the process.

• > Be prepared to compromise and negotiate in good faith. Property settlements require a willingness to listen and work towards a mutually acceptable agreement.

• > Keep emotions in check (as much as possible). Property settlements are often emotionally charged, but it's important to try and approach the process as objectively and rationally as possible.

• > Consider alternative dispute resolution methods like mediation, which can be less adversarial and expensive than going to court.

• > Be honest and transparent about your financial situation. Failure to disclose assets or liabilities can have serious consequences.

• > Think about the long-term impact on any children involved, and ensure that their best interests are a primary consideration in any settlement.

• > Seek support from friends, family, or professionals if you're feeling overwhelmed or struggling to cope with the emotional stress of the situation.

Looking for the best Family Lawyer in Sydney?

If you’re facing separation and need assistance with property settlement or parenting arrangements, Buckley Lawyers is here to help. Matthew Buckley is a trusted family lawyer in Sydney, offering experienced legal representation and practical advice tailored to your unique situation. 

As a nationally accredited mediator and a member of several professional associations, Matthew is dedicated to providing personalised and cost-effective legal solutions.

Matthew’s areas of expertise include property settlements, parenting arrangements, binding financial agreements, and divorce. With a focus on integrity and trust, he aims to minimise costs and achieve the most favourable outcomes for his clients. 
Whether you’re looking to protect significant assets or navigate the complexities of child custody, Matthew provides clear, practical advice and strong advocacy to help you move forward confidently. Contact Matthew Buckley today for a consultation and take the first step towards resolving your family law matters with expert guidance.