Dealing with divorce is mentally and emotionally stressful, throw into the mix the separation of property and assets, and the complexities of the divorce just increased tenfold.
Marriage or de facto, a relationship breakdown can be one of the most stressful events in a person’s life. Every year, almost 50,000 marriages in Australia end in divorce, and an even greater number of relationships break down.
It’s a mentally and emotionally draining time, and having to sell a beloved family home on top of everything else, can add an enormous amount of stress. When dealing with the separation of assets (including property), the Family Court deals with the complex cases while the Federal Circuit Court of Australia deals with the less complicated property applications.
Either way, the complexities of the laws around property settlement can be quite challenging to navigate, so we spoke with leading Australian family law solicitor Geoff Brazel from Brazel Moore Family Lawyers in Gosford about dealing with property and divorce.
Determining the separation date
The separation date can affect property settlement and property division, so it’s crucial to determine the date early on. To do this, both parties simply need to swear an affidavit (an oath to promise to tell the truth) in which the date of separation is sworn.
For many reasons, the relationship has broken down, but both parties remain living together under the one roof. There is a requirement by the court for them to provide additional evidence to show that they are no longer presenting to the world as a couple. The court will normally require somebody from outside the relationship (for example, a friend) to swear an affidavit in court.
Gathering all of the information
Time and effort have to go into finding out what all the assets are to get a complete history of the financial relationship of the parties—looking at future needs, particularly one party who has the ongoing care of children.
Solicitors play a crucial role in gathering the information together and giving people a range of possible outcomes; however, they cannot say that “This is definitely what your result will be if you go to court”. Geoff explains that statistically, 90 per cent of all matters settle and only 10 per cent of matters go to court.
What you need to know about property applications
A property application is a written application filed in court to seek orders that, for example, the house be sold and that a percentage of the proceeds of the sale be paid to you. Whatever it is that you request of the court is set out in the property application document.
However, before you get to that stage, there is a requirement under the Family Law Act that parties comply with pre-application procedures. These procedures involve full disclosure by both parties of all the assets they have, such as real estate, motor vehicles, boats, investment properties, shares and superannuation. Property is everything the couple owns, and all these things need to be properly disclosed.
Part of the documentation filed in court will be a document that certifies that those disclosures have been made to the other side. And that the parties have been involved in genuine attempts to try and resolve the matter before proceeding to court.
Time limitations on property applications
There are time limitations in relation to applications for property. The Family Court of Australia states that if you were married, applications for property adjustment must be made within 12 months of your divorce becoming final. If you’re in a de facto relationship, it must happen within two years of the breakdown of your de facto relationship.
Resolving matters outside of court
Going to court is expensive and should only be considered as a last resort. Finding an amicable resolution that works is in the interest of both parties. Depending on how your particular case is progressing, there are several steps, with mediation the most common.
The art of settlement is all about compromise. If you can do that and walk away with a deal that you can live with, you will save yourself probably tens of thousands of dollars in legal costs. A marriage breakdown is a very emotive time and can generate bitterness, but being prepared to compromise will save you a lot of grief, money and time in the long run.
A checklist for a property application
The rules of the court require a number of things, as follows:
- Bank statements for the previous twelve months
- The last three years’ tax returns
- Real estate agent market appraisals for any property
- The value of any cars and motorbikes (can be downloaded from the internet at redbook.com)
- Details of shares and investments
- Interests in any business that either of the parties might be operating
- Recent superannuation statements
- Any documentation related to the value of all property, whether in joint names or individually
- All property in an individual’s name will be regarded as matrimonial property. There is a requirement to disclose all property, irrespective of whose name it is in.
Dealing with divorce is complex, and there are many factors at play. The advice provided here is general in nature and is intended as a guide. It should not be regarded as legal, financial or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial or real estate decisions.