‘Property’ has a fairly broad definition under family law. It includes more than just your bank account and your house, it also includes any investments, shares, your business, or any superannuation that is held by you.
Anything you owe money on, or any debts you may have, must also be handled by a property settlement. This could include any debts you have with your bank, mortgage debts, credit card debts or any finance you have on a car.
All assets and debts owned by you and your former partner need to be discussed and dealt with if you are to have a successful property settlement. Failing to mention certain assets by either partner may result in the property settlement being thrown away by the courts meaning that you’ve just wasted a lot of time and effort for nothing.
At all costs, you should try and avoid going through the court system. The time it takes to resolve a property settlement is at least a year, however it could take up to 3 or 4 years to make a final decision as to who gets allocated what. This process is time-consuming, stressful and expensive.
Coming to an agreement with your partner may be difficult but it is the faster solution. When coming to an agreement with your partner, there are a number of factors that need to be considered before finalising the property settlement.
There is no one straight answer for this.
For example, if you have children, then the parent who has primary custody of the children generally keeps the marital home.
Or if there are no children, and one partner purchased the house with separate funds prior to the start of the relationship and the relationship was considered “short”, then it might stay with the party that purchased the property.
If there are no children involved, then courts vary considerably on how they distribute the marital home. The court has a set 4 step procedure that they use when determining how property is to be divided in a property settlement.
Until a property settlement is finalised, spouses don’t have the right to prevent the other from living in the family home, therefore it may be illegal for them to lock you out, and you can call the police if they try to do this.
People often think that courts will divide property between parties equally as in each party will receive 50% of the total asset pool.
The court will look at the individual facts and circumstances of each case and make an order for property settlement as they see appropriate. The court will normally tell both parties what assets should be sold and divided, and what assets should be kept and transferred to the other party.
Jane and John have a total of $500,000 in their property pool. This includes all bank accounts, property and debts. John is to get 70% of the property settlement and Jane is to get 30%.
The asset pool is made up of the following:
The property settlement split has decided to divide the property 70/30, meaning that John will get $350,000 and Jane gets $150,000.
The court makes the orders that:
This is just an example of how a split could work. Ultimately it is up to the parties to make decisions as to how they would like to receive the funds and what they would be happy with. If the parties cannot make a decision, the court will make it for them.