Most separating couples ending their marriage or de facto relationship reach an agreement about their property division without expensive litigation and drawn-out legal battles. It is vital that separating couples do not delay the process of working out ‘who gets what’ regarding their assets and liabilities (property pool). Here are three reasons why separating couples shouldn't delay dividing their property pool:-
1. Protect your assets. Your property pool, including assets, liabilities and superannuation, is calculated at the date of your property settlement and not the date of separation. The longer you delay a property settlement, the more likely your property pool's value will change. For example, over time, you may purchase a new property, increase the value of your superannuation, or have an asset that significantly increases in value. Your former spouse may be entitled to a percentage of any increase in the value of assets post-separation. Likewise, you may also be liable for any increase in debt that your former spouse has accrued.
2. Keeping separation amicable. If separating couples are on talking terms, they should try and keep their separation amicable by reaching a kitchen table agreement after each having the benefit of receiving legal advice. Having the benefit of legal advice before discussing a property settlement will mean that separating couples will each be informed and on the same page about dividing the property pool. If separating couples can remain amicable and reach a fair agreement on their own, they will likely save thousands in legal fees and may even remain friends. It is important for separating couples to record their agreement legally through a consent order or a binding financial agreement. The longer property matters remain unresolved, there is an increased likelihood that views and circumstances may change, leading to potential disputes and a possible deterioration in the relationship.
3. Time Limits. There are time limits to applying for a property division in the Federal Circuit and Family Court of Australia. The time limit to apply to the division of property when in a de facto relationship property is two years after the date of separation and 12 months after the date of divorce. If separating couples cannot reach an agreement about the division of assets and liabilities and need to apply for a property division out of time, leave of the Court must be sought. Leave of the Court to file out of time is not guaranteed and can be costly and time-consuming. Finalising the division of assets and liabilities early and amicably means fewer time constraints, less pressure and minimises the risk of having to file urgent applications to the Federal Circuit and Family Court of Australia.
Separation can be contentious, but in cases that relate to the division of assets and liabilities, separating couples may be battling to protect what they see as their financial interests. Unfortunately, by engaging in protracted and expensive litigation, separating couples may instead negatively impact their financial interests. Other ways of resolving matrimonial or de facto relationship property disputes may allow separating couples to achieve positive and mutual results that are lasting and considerably less expensive.
Grace Family and Collaborative Law provide innovative solutions, including mediation and collaborative separation, for separating couples seeking to resolve their dispute in a non-adversarial process that will save time, stress and money.
If you would like to learn more about ways to achieve an early property settlement or how we can help you achieve an amicable separation, contact Grace Family and Collaborative Law today to book a free, no-obligation 15-minute clarity call on 1300 414 855.