Property Division and Settlement – When to settle – Now or Later

13/10/2017

Relationships can breakdown over a long period of time or suddenly. 

 

At the time the relationships breakdown it may be thought that the property division will be relatively easily achieved and will be amicable.  “I only want what is fair”. 

 

Often advice is sought from Watson & Watson by a party to a marriage or de facto relationship where the asset pool is diverse and complex and while separation has occurred in some instances a number of years prior, a property settlement was not considered at that juncture and the parties now wish to address the matter of financial settlement with the expectation of achieving a “fair and equitable” asset spilt.

 

What is fair may change over time.  In cases where the parties to a marriage or de facto relationship that has broken down do not achieve a property division within a reasonable period after separation (and even for some years after separation) what ultimately occurs may not be fair. 

Different people have a different view about what is “fair”.

Family Court or Federal Circuit Court looks at the contributions that are made during the marriage or the relationship in terms of financial and non-financial contributions made by each party to the acquisition, maintenance and improvement of the property.

The Courts also look at the non-financial contributions and the role of each party as a parent and homemaker.

Immediately after separation the parties are in a position to divide or have the Court divide and approve the division of property on the basis of what has occurred in the relationship that has now broken down.

In the absence of a documented (in accordance with the requirements of the Family Law Act), or Court approved settlement or a finalised Court hearing, each party will however continue to make contributions in a financial and non-financial sense after separation which is considered by the Family Court or Federal Circuit Court.

One parent may be caring for a child of the relationship or marriage and the other parent might be paying the mortgage or advancing their career.

Inheritances may be received or windfall gain may come into play.

It is often not realised that if there is a significant delay in settling property division after separation or break down of marriage or de facto relationship, that post-separation contributions come into play.  The issue of how post-separation contributions are dealt with can become significant and may lead to what most often by one or other party to the relationship or marriage will regard as unfair.

A person who had after separation continued to pay the mortgage on the former joint home might feel that all their separate post-separation contributions should be recognised in his or her favour and that the person who has not been contributing should not get any benefit of the payment.  This is not the way the Court approaches the issue.

If the parties cannot resolve the property division the Court will determine it after a hearing. There are significant delays in the Family Court or Federal Circuit Court hearing a matter.  In those circumstances, invariably post separation contributions (positive and negative) will be considered and taken into account. 

The Court will look at the value of the assets including property at the date the Court is considering the matter and will take into account post-financial contributions.

The Court is likely to find both parties have made post-separation contributions but of different kinds.  The husband or father may get credit for paying the mortgage and in part increasing the value of the equity of the house while the wife or mother may get credit for caring for and advancing the children’s interests.

The support given during a relationship by a wife to a husband to allow his career to advance and results in significant post-separation bonuses and wage increases may not necessarily result in the husband being able to keep all those increases and bonuses.

Parties to a broken marriage or de facto relationship should settle their property division as soon as possible after separation if a reasonable resolution is available.

A significant delay will be very costly financially and emotionally on relationships in particular with children.  If each of the parties to the marriage or relationship wants to resolve the matter and think that the initial proposal after separation and negotiation is unfair it is unlikely that you will think that any later proposed settlement or Court outcome is fair.

For many years we have been dealing with parties to the dispute and solicitors each of whom have their own view and consider the conduct (and likely conduct) of all parties in an attempt to obtain a favourable outcome for our clients.

At Watson & Watson our experienced family law solicitors can assist you in achieving an equitable property settlement which you may have thought unattainable.  If you are unsure as to your rights and entitlements in relation to your financial settlement, do not delay.  Please do not hesitate to contact Richard Watson, our senior family law solicitor or his assistant Shereen Da Gloria to discuss your concerns. 

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 02 9221 6011.

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