How to determine a ‘fair’ property settlement
There is a 4-step process to determine what you are entitled to when separating from your partner. Whether you engage a lawyer or not, this process can help you negotiate an agreement you feel comfortable with now and in the future.
Property Settlement after Divorce or Separation
A family law property settlement sets out how you and your ex-partner will divide your assets and debts. Legally, it is distinct from divorce. Married couples will need a divorce and a property settlement. Defacto couples will need a property settlement only.
1. Valuing assets such as real estate
You and your ex-partner may be able to agree to the value of your assets. However, if there is a dispute or disagreement, then an independent valuer is usually engaged to prepare a valuation report. This can include valuation of real estate, jewellery, motor vehicles, businesses and entities.
2. Family businesses
If one or both partners own or part-own a business, valuation by a forensic accountant is usually required. Turnover alone is not a good measure of value – an accountant will also look at profit margins, client stability and other factors.
It is also important to confirm the legal shareholder(s) and director(s) of the business. From our experience, many people are unaware that they are a shareholder or director until they separate.
3. What if your ex-partner is hiding assets?
In Australia you are legally required to disclose all your assets – even if the other party doesn’t ask about them, even if those assets are overseas. But some people still try to hide assets.
If your ex-partner is not forthcoming about their affairs, Moran Family Law can assist. We have the expertise and experience to trace money and uncover assets. Where necessary, we engage and work closely with other experts, such as forensic accountants.
Full and frank disclosure is the cornerstone of any financial property settlement. There can be serious consequences for failing to make complete disclosure of your financial circumstances.
Contributions to the relationship can be financial or non-financial. Some examples are:
Your individual savings and assets when you began the relationship
Financial support from your family members to buy a family home
Time spent looking after children
Time and effort renovating your home or other property asset
Gifts and inheritances received by a party to the relationship
Other time and effort spent attending to the welfare of the family, such as in the role of homemaker
Each partner's current circumstances and likely future circumstances are assessed and considered. For example:
Will one party be primarily responsible for the care of children from the relationship?
Does one party have a higher earning capacity than the other?
Are there differences in age or health?
Are there any other relevant factors that should be taken into account?
Make your property settlement legally binding
Most separating couples reach agreement without going to Court.
Litigation is a final resort, used if other dispute resolution techniques are ineffective or have failed. If you litigate, the Court orders are legally binding.
When you and your ex agree to a financial settlement without litigation, there are two ways to make this agreement legally binding.
1.Consent orders
Consent orders are sent to the Court – once the Court puts its seal on the orders, they are legally binding.
Another way to legally document your property settlement is through a binding financial agreement.
2. Binding financial agreement
A binding financial agreement is also known as a prenuptial agreement or postnuptial agreement. It operates in a similar way to a private contract between the parties, without involving the Court. Unlike most contracts, there are additional requirements that need to be met for the agreement to be binding and enforceable at law, and parties must use a lawyer to certify that they have received appropriate advice.
