How to settle property once you have separated from your partner

At the end of a long-term relationship, it is often the case that there are disputes regarding the property that need to be settled. There are many ways to approach property settlement following separation, including through private negotiation between each partner. If you cannot reach an agreement by negotiating directly with your ex-spouse or partner, you should seek the advice of an experienced lawyer.

Does the Family Law Act prescribe a method for property settlement?

The Family Law Act 1975 (Cth) (the Act) does not have a prescribed method for settling a property dispute. In fact, there is no specific method designated for settling a property dispute and parties are free to negotiate between one another, make a court application, or submit the appropriate forms.

Some ex-partners will prefer to resolve the matter privately by utilising the Family Court’s family dispute-resolution process, whereas others prefer settling a property dispute with the assistance of lawyers. If an agreement is reached between the parties, by whatever means, the Act has methods for formalising these arrangements.

In addition, there is no hard and fast rule about how the property is divided, i.e. in what proportion, e.g. 50/50. In fact, when settling a property dispute, property can, in theory, be split down the middle or one party may end up with all of the estate. Regardless of how the assets are divided, neither party is permitted to give any of its assets to parties outside of the relationship.

The importance of formalising the Agreement

While it is not a legal requirement to make an agreement formal when settling a property dispute, the downside of not doing so is that the Agreement will lose its legal enforceability.

If one party is unhappy with the result

Settling a property dispute through negotiations can be a very effective way of resolving the matter, but sometimes one party will be more displeased than the other. If, and when, this occurs, the disgruntled party has one year to make an application to modify the arrangement, and 2 years for de facto relationships. If, however, the timeframe has lapsed but one party is quite clearly disadvantaged by the settlement arrangement, the Courts may grant approval to review the matter.

Private Settlement

There are a number of considerations when privately settling a property dispute post-separation, including the following:

• Financial Considerations

Discuss with your ex-partner what the debts and assets of the relationships are that will be included in the settlement of the property dispute. It is important that all the assets and liabilities are taken into account so that there is a fair assessment of the total valuation of the property.

• Always Negotiate

Once you and your ex-partner have made a joint determination of the value of the asset/liability pool, you will be better placed to commence negotiations. Make sure that you either write down any agreed disbursements of property or have a lawyer write these down for you. Whether you and your ex-partner prefer to divide the assets individually or you adopt a more general approach, the details of any agreement should be clearly expressed in writing wherever possible.

• Formalise the terms of the Agreement

If your lawyer is already present during the negotiation process, it might be worth formalising the arrangement in a Consent Order. If your lawyer is not present, it would be worth approaching one with the details of the agreement so that they can take steps to assist with the drafting of the terms of the property settlement.

Conclusion

Have you recently separated from your partner? Looking to formalise an agreement regarding your collective property? Get in touch with one of LegalVision’s business lawyers who can assist you with drafting an agreement concerning your property.