Divorcing couples often get incorrect information about how a Family Law Court will make a property settlement after a divorce. Here are nine things that many people believe that are not necessarily true.
When the court makes a property settlement, it begins by identifying and valuing all property that the parties own. It does not matter how the property is titled, who paid for it, or whether it was acquired before or during the marriage. In a relatively short marriage, the court might return to each party the property that each brought into the marriage.
In a longer marriage, however, the court might decide that nonfinancial contributions of one spouse offset the asset contributions of the other and might divide the property equally, even if that deprives a spouse of property that the spouse brought into the marriage.
The property pool that the court will divide consists of all property owned by the parties. It does not matter which spouse has control or possession of the property at the time the property settlement is made. The court might order you to give the property in your possession to your former spouse.
The court will determine and value the property in the property pool based on the property each spouse owns on the date of the court hearing, not on the date of the separation. That means that property you acquire after separation, and even property you acquire with another person, can be included in the property pool.
For that reason, it is almost always wise to make a property settlement as soon as you can after you separate. You can only get on with your financial life once you have made a financial agreement with your former spouse or obtained a property settlement from the court.
Australia has a “no-fault” divorce law. The court will not punish a spouse by reducing his or her share of the property pool if that spouse committed adultery or abandoned the other spouse. Unless the behaviour that caused the divorce is relevant to the property settlement.
For example, if one spouse squandered marital assets by gambling and that is a cause of the divorce a Family Law Court will divide the property pool without considering the reasons that underlie the divorce.
The court must follow a series of steps when dividing property. The primary factors it considers are the financial and nonfinancial contributions that each spouse made to the property pool and to the marital relationship. In longer marriages, many courts view those contributions as being equal, resulting in an equal division of property, but that will not always be the case. The judge makes a decision based on the unique facts of the case before the court.
If you deliberately give away property or change the title in order to avoid its inclusion in the property pool, the court may decide that you have committed an act of fraud. It will take that into account when it divides the remaining property. You may receive less of the property in the property pool if the court believes you are hiding other property that will be returned to you after the property settlement becomes final.
You and your spouse need to be separated for at least 12 months before you can apply for a divorce. You can divide your property, however, as soon as you separate. You can make a written agreement concerning your property settlement even before you have divorced. If you need to apply to a Family Law Court for a property settlement, however, you must do so no later than 12 months after your divorce be becomes final. In most cases, it makes sense to start talking to your spouse about a property settlement as soon as you decide to separate.
Prenuptial agreements are made by parties contemplating marriage. They usually spell out what will happen to property brought into the marriage and acquired during the marriage if the parties divorce. While people hear about prenuptial agreements being used in America, more and more couples are protecting themselves financially by making those agreements in Australia.
The legal term for such an agreement in Australia is a Binding Financial Agreement. There are specific actions that must be taken to enter into an enforceable Binding Financial Agreement. For example, you must obtain legal advice before signing it.
If one spouse is primarily responsible for raising the children, the court can take that fact into account when making a property settlement. While child support is the most important way that Australia assures the financial needs of children are met, a court might (for example) award the use of a home to a parent who has custody of the children until the children reach the age of 18.