FAMILY LAW FINANCIAL MATTERS
PRE-NUPTIAL AGREEMENTS, FINANCIAL AGREEMENTS
& PROPERTY SETTLEMENT
FAMILY LAW FINANCIAL MATTERS
On this page, you will find information about family law financial matters. Family law is a very complex area of law. This information is general in nature, does not contemplate all scenarios, does not consider your personal circumstances and should not be taken as legal advice. Speak to one of our family law lawyers today on 1800 572 417 for legal advice.
When two people get married, or they have lived together for at least two years or they have made contributions to the relationship then they will begin to accumulate property rights in that relationship under the Family Law Act 1975 (Cth). This page deals with those family law property rights.
Financial matters can be considered. While usually family law financial matters are only considered after separation, before marriage or entering into a de facto relationship. You can plan for financial matters:
Before your relationship begins: (e.g. prenuptial agreement)
enter a de facto relationship; or
start living together.
During your relationship together; or
Before You Marry or Start Living Together
You and your fiancé/soon to be spouse in the case of marriage or de facto partner in the case of a de facto relationship can control what happens to your property and assets in the case that you separate in the future. In Australia, this is done through a voluntary agreement called a Binding Financial Agreement. This type of agreement is also commonly known as a pre-nuptial agreement.
The Binding Financial Agreement must be entered into voluntarily and comply with the laws that govern these type of agreements to be valid and enforceable. A Binding Financial Agreement can provide some protection to the assets brought into the relationship by either or both parties, the assets that accumulate during the relationship, and in the event of separation what will happen to the property and assets.
Under some circumstances, a Binding Financial Agreement may become unenforceable or its protections watered down. At My Legal Crunch, we provide experienced advice on Binding Financial Agreements to meet your individual needs and provide you with the best protection available.
During Your Relationship Together
You can enter into a Binding Financial Agreement any time after you have married or started living together in a de facto relationship. In the Binding Financial Agreement, you can both agree what will happen to the assets you each brought into the relationship, the assets that you accumulated during the relationship and what will happen to these assets in the event that you separate.
When You Are Separating Or You Have Separated
When you have separated in Australia on a permanent basis from a former partner, both you are your former partner may have rights over the property you each brought into the relationship and the property that accumulated during the relationship. In some cases, the property you accumulate after the relationship has ended can be taken into account as well. There are many factors that determine how property can be fairly divided under the Family Law Act 1975 or if you are in a de facto relationship in Western Australia, the Family Court Act 1997.
It's important to understand that there are time limits during which you can enforce your rights over the property after separation. If you go past these time limits you may not be able to bring about the division of your property at all. Some exceptions do apply to family law time limits which may allow the time limit to be ignored. If you need to know which family law time limits apply to you, contact us now so we can provide you with legal advice based on your personal circumstances.
3 Methods of Property Settlement After Separation
There are three methods of property settlement after separation that allow you and your former partner to legally separate the property between you both on a permanent basis. These are:
1) Binding Financial Agreement
A Binding Financial Agreement is a private contract under the Family Law Act 1975 (Cth) between you and your former partner that determines how the property between you is to be divided. There are specific rules that apply to Binding Financial Agreements which if not complied with may result in the agreement not being valid meaning the terms of the settlement are unenforceable. One condition requires both parties to have independent legal advice from a lawyer. My Legal Crunch can draft a Binding Financial Agreement for you or review a Binding Financial Agreement provided from your former partner’s lawyer. We will give you legal advice about the validity of a Binding Financial Agreement and ensure you understand the terms of the agreement and the effects on your family law property division.
2) Application for Consent Orders
An Application for Consent Orders is an application along with proposed Court Orders for property settlement and division of assets between you and your former partner. While the Application for Consent Orders is made to the Family Court of Australia, this application is not the same as taking your former partner to Court or your former partner taking you to Court to litigate your family law property settlement.
An Application for Consent Orders along with proposed Court Orders is a voluntary agreement between you and your former partner that is submitted jointly on an amicable basis to the Family Court of Australia. The Family Court has duties under the Family Law Act 1975 to make sure the agreement is fair and equitable. If the Family Court approves your Application for Consent Orders it will issue Court Orders that are enforceable at law for the division of the property and assets of your former relationship.
3) Commencing Court Proceedings for Property Settlement
If you and your former partner are not able to agree on the division of your property and assets on a voluntary basis, sometimes the best option is to commence court proceeding for the division of property. This is often the best option where:
Your former partner is unfairly withholding property or assets; or
Your former partner has used or is threatening to use joint assets, money or property accumulated during the relationship without your authority; or
Your former partner is not being reasonable about the separation; or
Your former partner is refusing to enter negotiations; or
Your former partner is delaying property settlement until you reach a family law time limit which may prevent you from commencing family law proceedings to bring about the division of your property and assets.
When you bring your property matters before the Federal Circuit Court of Australia or the Family Court of Australia you will enable the jurisdictions of these Courts to allow Court Orders to be made for the fair and just division of property and assets between you and your former partner.
If your former partner refuses to participate in property settlement proceedings we may be able to obtain a default judgment in your favour.
While we always prefer to keep matters amicable and avoid court proceedings, sometimes taking things to Court is the only way property settlement can be reached. My Legal Crunch has experienced lawyers who regularly guide clients through family law property proceedings. My Legal Crunch will endeavour to resolve your property law matter it goes through to final trial. The vast majority of family law court proceedings that My Legal Crunch handle are settled before final trial.
What Factors are Considered in Property Settlement?
The factors considered during any property settlement are always subject to the personal circumstances and contributions of each party. There are many other factors which can be taken into account. There are often exceptions and special circumstances where the general rules change or do not apply. For this reason, you must not take the following information as legal advice, it is not based on your specific circumstances and is general information only.
Factors Considered in Property Settlement
Whether property settlement occurs by way of a Binding Financial Agreement, an Application for Consent Orders or Court proceedings, the factors considered are:
1. The assets and property you and your former partner have. While this is not an exhaustive list, it includes assets and property such as houses and real property, cars, boats, investment properties (in most cases), money in the bank, shares, interests in business, interests in trusts, expensive furniture, jewellery, long service leave, work entitlements and inheritance. This can include property where someone else holds the property for you.
2. The income from all sources that you are your former partner is entitled to receive. This includes where someone else receives income on your behalf.
3. The debts and liabilities you and your former partner have. While this is not an exhaustive list, it includes debts and liability such as mortgages, personal loans, credit cards, overdraft debts, personal debts, tax liability, business debt and director guarantees leading to debt recovery from a director.
What contributions were made by each party including property and income contributions such as:
1. Property and assets brought to the relationship by each party;
2. The employment income earned and other income contributed to the relationship by each party during the relationship;
3. Any other assets or property contributed from other sources such as inheritance during the relationship.
What contributions were made by each party such as caring for children or the other party including:
1. Where a parent ceased work or did not have the same work opportunities due to parenting duties of the parties' children;
2. Contributions such as homemaker duties including cooking and cleaning; and
3. Where a party ceased work to look after the other party or had carer responsibilities.
Whether you or your former partner or your children had/have any health issues or special needs.
1. Your age, the age of your former partner and any major difference between your ages;
2. Years until your and your former partner's retirement;
3. Whether you or your former partner have any health issues or special needs;
4. Whether you or your former partner have any parenting or caring responsibilities;
5. The effect that the relationship had on your or your former partner's future ability to earn income and/or obtain employment.
Just and Equitable Division of Property
Having considered your and your former partner's financial resources, contributions, other factors and the various exceptions and special rules that can apply, the law looks to divide the property between you in a just and equitable way.
As to what constitutes a just and equitable division of property is dependent on your and your former partner's individual circumstances. This is why it's important to get legal advice so you understand what your rights are in your family law property settlement.
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