Just as entering into a marriage or de facto relationship is a pivotal life decision, so are the financial repercussions of relationship breakdown and property settlement after separation.
The high cost of engaging lawyers to assist in closing the financial door between separating couples takes on a different perspective when that door is left open, only for the financially disadvantaged party to potentially come knocking years later.
Even the most amicable of separations can unravel when there is no legal formality about the division of property between couples after separation.
There is no statutory time limit on property settlements for separated married couples that have not divorced. Divorced couples have a time limit of one year after the divorce date to apply for an adjustment of property without leave of the court. Separated de facto couples have a two year limit after separation to apply for an adjustment of property without leave of the court.
It is mandatory to endeavour to resolve property settlements prior to applying to the court. This can be done through negotiation between the parties and mediation.
Where the parties fail to reach agreement, arbitration is an expedient, cost-effective way of resolving disputes without protracted litigation for property matters only. However, both parties must consent to being referred by the court to arbitration to resolve their dispute.
Determination of property settlements through arbitration has the same effect as orders made by the court. Where a party is dissatisfied with the outcome of arbitration, decisions can be appealed for review to the Federal Circuit and Family Court of Australia.
Key Takeaways: Property Settlements
- Formalize your agreement: Informal arrangements leave you vulnerable to future financial claims, even years later.
- Know the time limits:
- Divorced couples: 1 year from the divorce date.
- De facto couples: 2 years from the date of separation.
- Mediation is mandatory: You must attempt to resolve disputes through negotiation or mediation before applying to the court.
- Arbitration is an option: If you cannot agree, arbitration offers a faster, more cost-effective alternative to protracted litigation.
