How is a divorce settlement worked out?
At the time of a separation from your spouse or partner the question you might be asking yourself is “what is the property settlement process after separation?” or “how much will I get?” The property settlement process can take place any time after separation has occurred, you don’t have to wait for a divorce.
Property settlement time limit after divorce
It is important to be aware that there is a time limit for a property settlement after divorce. This is known as the limitation period, and it is the time period in which you are permitted to file proceedings for property settlement in the family court. Once the time limit passes you cannot make a court application without first seeking permission form the court, and the court may not give you that leave. The time limit is 12 months after the date of your divorce (in the case of married couples) and two years after the date of separation for de facto couples.
Who gets what in the divorce settlement process?
There is no set family law property settlement calculator because it is not a strict mathematical process. Entitlements are different in every matter. Below is a snapshot on the steps to take, but working out how a property division will occur is not easy, so it is important that you get property settlement advice from an Accredited Family Law Specialist.
The property settlement process includes the following:
- What is the net pool of property available to divide?
- What contributions have the spouses made?
- What are the future needs of the spouses? and
- Is the proposed property division just and equitable?
Property settlement tip : it is important to start collating your financial paperwork, such as tax returns, bank statements etc. to get as clear a picture as you can of the property values involved. It may also be necessary to exchange financial documentation with your former spouse or partner. You may also have to jointly obtain valuations of any property values in dispute, especially real estate. The spouses will need to try to agree on the values of each of the assets.
Calculating the net pool of property
This part is the foundation stage of the process and is a necessary first step in determining a property settlement percentage range. Things can get tricky at this stage, especially if your former spouse or partner is trying to hide assets or be less than upfront about their finances and that is why seeking property settlement advice from a family lawyer at the start is important.
What contributions have you both made to the relationship and what are they worth?
In the property settlement process the types of contributions taken into account include financial, non-financial, and, homemaker and/or parent contributions.
Financial contributions: the considerations for financial contributions are wide and include what each of you owned when you first moved in together, as well as any gifts or inheritances received during the relationship. These are just some of the considerations.
Non-financial contributions: this refers to what each spouse has contributed to the conservation, preservation or improvement of property, for example have you or your spouse renovated the family home?
Homemaker/parenting contributions: This takes into account if one spouse has been a stay at home parent, or reduced their work hours to look after the children. It also takes into account the contributions both spouses have made to the domestic duties of the household, such as cooking and cleaning.
All of these contributions need to be evaluated in the context of other factors about your relationship including the length of your relationship and the “future needs” of both of you.
This is where we need to look ahead and take into consideration the factors affecting the future needs of both spouses. There are a wide range of factors taken into consideration at this stage, some of them are:
- the age and health of both parties;
- whether one spouse earns a higher income than the other; and
- who has the care of the children;
Just and equitable: Lastly, it is necessary to consider what is a fair result? For a property division this is referred to as to whether it is ‘just and equitable’ to both parties.
This property settlement process will result in a percentage division of the pool of property between the spouses. It is important that whatever the property settlement you reach with your former spouse or partner, that it is properly formalised. We strongly suggest you seek property settlement advice from an Accredited Family Law Specialist for your specific situation as well as to see what the best way is for you to formalise your property settlement.
Tips: Everyone’s situation is different, and it is of no assistance to rely on an outcome that a friend or family member may have achieved in relation to their property settlement, as their circumstances may be different to your own.
The calculation of a property settlement is complex. We suggest that if you are considering separating or have recently separated, that you get specialist family law advice as soon as possible.
Frequently Asked Questions (FAQs)
Q. I have separated from my partner, do I need to wait 12 months before doing a property settlement?
A. No. While you can do the property settlement process after divorce, you can also do it as soon as you separate. We recommend you look at doing it sooner rather than later.
Q. Isn’t it always just 50%-50% with property settlement?
A. No, it will depend on the circumstances of your case, but there is no 50% – 50% starting point.
Q. Why do I need to see a lawyer? My neighbour just went through the same thing – they have told me what to do.
A. Everyone’s situation is different, and you cannot rely on an outcome that a friend or family member may have achieved in their own unique circumstances.
Contact us for your own advice. Phone (07) 3221 4300 for a fixed-cost no obligation appointment with a family law expert.