How To Split Assets After Separation?
The Family Law Act 1975 outlines how the court determines what your entitlements are after separation through a four step process:
What is the property pool? As above, figure out what the current property pool is.
What are each person's contributions? This takes into account initial contributions, financial and non-financial contributions (like caring for a child) and post-separation contributions. *this also includes negative contributions, like accumulating debt or 'wasting' money
What are each person's future needs? This looks at how easily each party can rebuilt their life after separation and makes an adjustment for the settlement depending on that.
- Is it just and equitable to make an order? The final step is making sure the proposed division is fair for both parties.
What your entitlements are depends on the individual circumstances of your case so it is a good idea to at least get some advice from a good family lawyer to understand your rights. Click here to arrange a free no obligation telephone consultation to find out what you are entitled to. Also check out our article, How much does a Family Lawyer cost? to understand how legal fees work.
The best way to resolve your property split is to sort it out without going to court. Sometimes court is a necessity, but it is always a good idea to attempt to reach an agreement before starting proceedings. You can negotiate with your former partner through a lawyer or yourself and proposals as to what you believe the asset split should be. When you are trying reach an agreement, you should think about what is important to you. For example, if you wish to retain the family home, then think about what other assets you would be prepared to part with and make sure that you are able to refinance before making that proposal. Outlining your contributions, and acknowledging the other person's contribution, is a good way to start negotiations so you both understand what you have each contributed to the property pool.
You can finalise your financial settlement through Consent Orders or a Binding Financial Agreement. For a Binding Financial Agreement, you must have independent legal advice from an experienced family lawyer. It is best to get legal assistance, but some people can do Consent Orders themselves. Download the DIY Consent Order kit and follow the instructions. There are several requirements that you must address in your orders. You need to specifically deal with every asset and liability and how they will be divided amoung the parties. When drafting financial orders, you need to make sure that the division that you have agreed to is just and equitable or the court will not make the order.
It is important that you finalise your agreement legally as both parties are able to apply to the court for property proceedings within 2 years from separation for de facto relationships and within 1 year after divorce for married couples.
If you can't reach an agreement, then you can attempt mediation or arbitration or make an application to the court to have them decide your dispute.
Once you have a Consent Order or Binding Financial Agreement, you need to give effect to that agreement. If you have arranged for the transfer of a house, speak with a conveyancer and/or the bank to arrange the transfer. If you are splitting superannuation, check with the superannuation as to the process and fill out the appropriate forms. Receiving your Court Order will not automatically transfer property, you will need to use the Family Law document to organise the actual separation of assets yourself.
As a side note, make sure that you update your will, power of attorneys and life insurance beneficiaries after separation. If you are thinking about sorting out your divorce, check out our article, How do I start the divorce process?
We are separation solicitors with years of experience in modest and complex property law disputes including those involving trusts, businesses and overseas assets. We have expertise in negotiation, mediation, arbitration as well as court advocacy.
Contact us for more information or to book a free legal advice session to find out your options.