Sadly, as we all know, relationships sometimes just do not work out and when we go our separate ways, there needs to be a division of property and assets. Life would be very simple if the myth that each party got 50% were true, though the reality is that this simple split is simply not the case. The Family Law Act of 1975 covers all aspects of what is termed “property settlement”, and doesn’t just cover the house. It also covers, money held in the bank, cars, other real estate, boats, household contents, business interests, investments and Superannuation, not to mention maintenance, child support and financial enforcements.
Determining a property settlement
Family Law property settlements can be extremely complex and virtually every case is different. The Family Law Act provides general principles for the court to consider when deciding financial matters when a marriage or relationship with shared property, breaks down. There is no universal formula, as in every case the court will have to make a judgment based on a variety of discretionary criteria. Every case is therefore different, so if you follow, albeit well-meaning advice, from friends or family, you are probably headed towards disaster. Some of the things taken into consideration are the current value of the property, allowing for liabilities, such as a mortgage, the direct financial contributions from each side when the relationship commenced, and windfalls or inheritances one party may have received during the relationship. Non-financial contributions will also be considered. Caring for children and being the homemaker, time spent maintaining, extending or improving the property are also important considerations for the court.
Ensuring the outcome is fair
While the court assesses the above contributions, there are still more factors that it needs to take into consideration. When the parties separate, the court will take into account the future needs of each side, such as age, health, childcare and education, along with their relative potential earning ability. The final test is to decide if the proposed property settlement can be considered fair and equitable to both sides, in the circumstances. Given the complex nature of the combined considerations the court must consider, you can easily see that every case is naturally unique. The chances are high that your settlement may be vastly different from others you have heard about.
Because the law is so complex and the issues complicated, it is highly inadvisable to make an informal settlement, though you are quite within your rights to do so. However, unless the agreement has been formally approved by a court, it is not legally binding, thus one party could renege on the deal and come to the court seeking a larger share in the future. It is preferable for the two parties, working though respective lawyers, to reach terms of settlement and then submit an Application for Consent Order, which has the same legal force as issued by a judge. This takes a great deal of the uncertainty away, as you know exactly what the terms are and what you will be getting, while court proceedings are expensive and provide an uncertain outcome. The smartest move is to discuss everything with your local legal professional, before you do anything.