Take Home Message
Sadly, relationships breakdown despite the best intentions. No one goes into a marriage thinking that it will fold, but they do about one-third of the time. Consequently, when relationships do break down, the most common question family lawyers are asked is, “who gets what in a property settlement.”
Who gets what in a Property Settlement is a topic plagued by lots of myths. Some of those myths surrounding who gets what in a property settlement include:
- women will get substantially more
- it’s always an equal 50/50 split
- the breadwinner gets the most
- you have to go to Court and let them work it out
Of course, there are many other myths as well. However, the truth of the matter is that there are no single rules that apply to who gets what in a property settlement. The truth is that each property settlement will be different from another because they are decided on their own facts.
So, let’s get the fundamentals right first.
What is a Property Settlement?
In its simplest form, a property settlement is an agreement between you and your ex-partner or imposed by the court, that sets out who gets what with respect to the assets of the relationship.
As lawyers, we call the assets in this context, the “property pool.”
What Does the Property Pool Include?
The property pool is far-reaching and can include many things. The most common assets are:
- property, which includes the marital home and any investment properties purchased prior to or during the marriage;
- business interests;
- stocks;
- bonds;
- savings;
- superannuation;
- cars, boats, motorcycles;
- person effects, like jewellery etc
The property pool also includes all the liabilities as well, such as mortgages, credit cards, personal loans and any other debts.
When it comes to who gets what in a property settlement, disregard another big myth, that being that if assets are in the name of one person and not both, they are quarantined from the property pool. This is not true.
Who Will Assess the Property Pool?
Depending upon the complexity of the property pool, it may require that there is an independent assessment of the assets and liabilities. This may be carried out by an accountant. However, if it’s not complex, then it’s the valuation and calculation of those assets against the liabilities.
It’s recommended that the property pool is considered by you and your ex-partner soon after separation. This allows not only both of you to move-on, but it will become more complex to determine that property pool because those assets and liabilities may continue to be active by one or both of you following separation. In other words, be looking at getting the property settlement done and dusted in the early stages following separation.
But once this is done, it’s not all over as there needs to be consideration towards the contributions that each has brought into the relationship.
These non-financial contributions can be:
- non-financial contributions to the “acquisition, conservation or improvement of any of the property of the parties” such as making improvements to the family home through their own labour;
- non-financial contributions including homemaker and parenting contributions.
Importantly, you need to understand that in working out who gets what in a property settlement, non-financial contributions may not be treated any less important than financial contributions. In determining this, the Court will take into consideration all the evidence presented, then it will attribute a percentage value in respect to that contribution.
But You Said We Don’t Have to Go to Court?
There’s nothing stopping you reaching an agreement among yourselves and having it drafted and made binding by the Court. In fact, it’s encouraged. There are substantial risks in going to Court and giving the decision-making power to someone who may not fully understand your position. Put bluntly, there are no winners in family law litigation, only those who walk away dismayed but having to live with the decision.
Mediation is a far better way to determine who gets what in a property settlement, allowing you both to have control over the outcome.
Will you get exactly what you want? That’s unlikely, but you will get to resolve the matter significantly quicker than waiting for a Court to decide (average time is 3 years) and you will save massive legal fees. The average hourly rate of a family lawyer is $350 per hour.
So, What Do We Do Now?
The starting point is to try and reach an agreement that between you both you’re going to do your best and work out who gets what. Even if you can get part of the way with agreeing on some things, you can then use mediation for the rest of it.
A good mediator (those who we use at Law By Dan) are also family lawyers. They understand both family law and effective strategies that will bring you both to an agreement.
Once an agreement is in place, the agreement can be drafted and put before the Court to be officially recognised and once done, will be a legally binding agreement.
Nope. We can’t reach an agreement
At times that’s not unusual. Seeking the help of a family lawyer can assist in moving you both towards an agreement. Just because you seek help from a family lawyer does not mean that you’re on a one-way track to Court. A good family lawyer is one that is focussed on early resolution, doing whatever is necessary to reach an agreement you can live with.
Are There Time Limits in Relation to a Property Settlement?
The Family Law Act sets out that you and your ex-partner have 12 months from the date of a final divorce order within which to file a court application for a property division. In the case of de facto couples, the time limitation is different. The time limit, in that case, is 2 years from the date of separation.
In the event that you miss the time limitation you will need to go to Court and have their approval to proceed.
Is There Anything Else We Need to Know About Who Gets What in a Property Settlement?
Not really! But let’s recap a few things.
- Disregard all the myths
- Try and do your property settlement as soon as possible after separation
- Try your best to reach agreement if not fully, at least on a number of things
- Choose mediation through Mediations Australia if you’re close to agreement
- If you cannot agree and you think it’s not likely, seek help from our family lawyers at Law By Dan.