When a marriage or de-facto relationship has irretrievably broken down, the financial arrangements that have taken place between the parties concerned have to be finalised.
For example, if there is a house which is jointly owned, a decision regarding its future occupancy has to be decided. It might be necessary to sell the house or one of the parties may wish to buy the other person’s share in the home.
If you fail to finalise your financial relationship, one of the parties may try to file a property settlement at some time in the future. If this occurs, the Court will not look at the property at the separation date, but they look at the proceeding’s date as their benchmark and, if it transits the Court process, the date of the trial. There could be situations where any property or debt which has been acquired following separation by one party is added to the property pool.
Real estate, or any assets acquired following separation (even if it’s with another person), rises in superannuation and savings, and rises in the value of former matrimonial home, may all be considered.
If one party inherits some money or wins a lottery after separation, but before a formal property settlement takes place, the lottery win or inheritance could be added to the property asset pool for consideration by the Court.
Either person in a marriage or a de-facto relationship can file an application for a property settlement at any time following separation. It is always better to sort out property settlements as soon as practicable after separation has occurred. Legal advice is helpful as it outlines rights and obligations of the parties involved.
There are some exceptions, but parties who have separated have to start proceedings for a property settlement i.e. file a Court application within the twelve months following the divorce for a couple who has been married and for a couple in a de facto relationship within two years after separation. If you do not bring property proceedings in the specified time limits, you rights may be lost.
If a property settlement has not been reached in these set time limits, the other party might still have the opportunity to file an Application for Property Settlement but it’s considered to be “out of time”. So, if you have not had property settlement, you could still be taking a risk outside these time limitations.