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Marital Property Settlements
It is becoming more common these days for people who are separating or contemplating separation to negotiate an agreement and have that agreement documented so that it is binding on both parties, thereby avoiding the inevitable cost of Court proceedings.
We recommend that you ensure you have a formal agreement in place so that it can be enforced, if necessary. Such an agreement can be registered with the Family Court, which then makes it legally binding on both parties.
It is a good idea to have a lawyer look over the agreement to ensure that it gives you a fair share of the property. This does not necessarily mean that there will be a 50/50 split. When determining a party’s entitlement under such an agreement, the following factors may be taken into account:
- Contributions either financial or non-financial that the parties have made to improve the home (either directly or indirectly). For example contributions as a parent or home-maker,
- The future needs of the individuals separating and the children, taking into account such details as the parties’ health, ages, income and a reasonable standard of living.
- The earning capability of the parties, and
- The length of the marriage, or period of co-habitation prior to the marriage.
Once the Court is satisfied that the agreement is fair and that there has been no fraud or undue influence involved, that agreement would usually be approved.
Alternatively a Binding Financial Agreement can be drafted. This is a legal contract which essentially by-passes the jurisdiction of the Family Court.
Such an agreement, for it to be binding on both parties, and enforceable, requires a Certificate to be signed by a separate lawyer for each party certifying that you have signed the agreement without duress or undue influence, that all assets and liabilities have been disclosed and that you have both received legal advice as to the outcomes and consequences of having signed the agreement.
If no agreement can be reached
If it is not possible to reach agreement on the terms of property settlement it may be necessary to file an Application in the Family Court or the Federal Magistrates Court.
During these proceedings, both parties are required to provide details regarding the value of assets including investments, superannuation entitlements and any bank account details. The Court will also order the parties to attend a conference with a Registrar of the Family Court to attempt to negotiate a settlement before the matter can be allocated a trial date.
Occasionally, one party is worried that their ex-partner will try and dispose of, or interfere with property before its value can be established. If that is the case, it is possible to apply to the Court for an injunction preventing this. A party can, for example, apply to freeze any bank accounts held by the other or to restrain them from selling or disposing of property or investments.
Whilst commencing proceedings in the Family Court or Federal Magistrates Court is a last resort, and will usually incur higher costs than reaching agreement, the settlement rate of matters prior to final hearing is as high as 95%.
De facto property settlements
If a couple live together, intend to do so, or wish to enter into a legal contract regarding division of assets you can have a certified “cohabitation agreement” prepared. For the agreement to be binding each partner must obtain independent legal advice from their own lawyer. Having a certified agreement can provide certainty in the event of separation and effectively by-passes the jurisdiction of the District Court.
If no agreement can be reached property disputes between de facto spouses fall within the ambit of the De Facto Relationships Act 1996. The De Facto Relationships Act applies to heterosexual relationships where the people involved have co-habited for at least three years or there is a child born to that relationship. The Act only applies to relationships that were substantially carried out in South Australia. Defacto matters are within the jurisdiction of State Courts including the District Court and Magistrates Court.
A claim for property entitlement under this Act must be made within 12 months of separation, but it is possible to seek an extension of time in exceptional circumstances.
The principles relating to the division of property between de facto couples are similar in many respects to those applying to married couples. In making a determination on what is fair and reasonable in the circumstances, the court will look at the financial circumstances of the parties, contributions to the relationship (both financial and non-financial), and what any co-habitation agreement might say. However, superannuation interests are treated differently in the Family Court as they are considered a “resource” rather than an asset.
Conclusion
Going to see a lawyer can help you understand your legal rights and responsibilities. You will gain some useful insight information on how the law applies to your circumstances. It is also necessary to obtain legal advice if you seek division of property pursuant to the terms of a binding legal document, whether you are married or a defacto couple. It is important that each party know their rights in the event of separation to protect both financial and personal interests.
The process of negotiating a settlement and having a binding document drawn up setting out the terms of any agreement reached can be a cost effective alternative to commencing proceedings in the Family Court or Federal Magistrates Court. However, if it is necessary to commence an Application in court, there is considerable emphasis, within the Court system on negotiation and full disclosure of assets and liabilities, thereby ensuring a high settlement rate.
At Andersons Lawyers we can help with all Family Law matters. Please contact us if you are seeking legal advice.
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