Relationship breakdowns are frequently likened to a death. Certainly, like a death, there is a good degree of grieving involved, along with the more practical management of affairs. During what is nearly always an emotional time this can seem like an insurmountable challenge.

Property Settlement is an arrangement about how you and your ex-spouse or domestic partner distribute property. It should be noted that a Property settlement can occur after separation and before divorce, or after divorce.

Property includes things like a house, a car or money in the bank. Property can also include less obvious things like long service leave entitlements, superannuation, potential compensation claims and debts owed.

It is always best if the parties can come to a mutual agreement. However, before moving forward with this it is always advisable to obtain independent legal advice to accurately determine your entitlements.

Once an agreement is reached between the parties, you should obtain Consent orders which reflect what you have agreed to. The benefit of Court ordered consent orders is, if one of the parties does not abide by the agreement, you

can go to the Courts to have the agreement enforced.
If you and your ex-spouse cannot reach an agreement, you can make an application to the Family Court to determine your property settlement.

It is important to note that if you have been divorced, you only have 12 months from the date of your divorce becoming finalised to apply to the Family Law Courts for a property settlement.

For independent advice in relation to your entitlements following a relationship breakdown speak to one of the expert solicitors at Welden & Coluccio Lawyers.

So you’ve been separated for a while and you haven’t yet managed to get around to sorting out the property settlement.  Life gets busy.  You might be operating in a ‘state of denial’ and emotionally unprepared to deal with it.  Sometimes reluctance simply stems from the reality that things are so complicated that you ‘just know’ that you will need to pay a lawyer to sort it all out.  Whatever your reasons for delaying your property settlement you must know and understand the risks associated with doing so.

Know your time limits:  There are time limits in initiating proceedings seeking property settlement or orders for maintenance in the Federal Circuit Court or Family Court.   For parties to a marriage this time limit is 12 months and 1 day from the date your Divorce became final (having had to be separated for 12 months to be able to file for Divorce in the first place).  For parties to a de facto couple it is 2 years from the date of separation.

When your time limit expires: Should your time limit expire without having finalised your property settlement (or issued proceedings to do so), you will be have to obtain special permission (formally called “leave of the Court”) by way of an interim Order.  The Court does not automatically give leave to the parties unless there is merit to do so.  For example, if it can be demonstrated that considerable hardship or financial disadvantage will be experienced by either party if these proceedings are dismissed on account of the expiry of the time limitation, it is likely that the Court will allow the Application and then hear it in the usual manner.   For maintenance proceedings it will need to be established that at the time the time limit expired you were unable to support yourself without government assistance (an income tested pension, allowance or other benefit).

The Unexpected (or Anticipated) Windfall:  Before you delay your property settlement it is critical to understand that the law is very clear that the property pool is assessed at the time of trial (not the date you separate).  Supposing you receive a large sum of money after separation (but before a property settlement takes place), this money may form part of the property pool.  Windfalls may be anticipated (an inheritance) or they may even be unexpected (lotto wins).

Beware the Risk of Dissipated Assets:  Delaying your property settlement can leave you exposed to the risk of dissipated assets.  Essentially this happens when one party wastes or squanders assets post-separation.   In order to prevent inheriting the impact of your exes poor fiscal choices you will need to prove that assets were indeed squandered on non-essential living expenses (ie demonstrate that your ex really didn’t need extended vacations on the Caribbean).  Proving this is the case often leads to long (and expensive) legal battles.  Should this be proven the Court will often treat the dissipated assets as a premature distribution of matrimonial property.  In other words, the person responsible for the dissipated assets gets less in the final settlement.  Alternatively, the Court may increase the percentage split awarded to one party than they otherwise would have received to ensure a just and equitable division of assets.  The Court’s approach varies, and there are many schools of thought as to how situations such as these are to be dealt with.

The Risk of Death: Delaying your property settlement can leave you open to other risks should one person die unexpectedly.  In this scenario it is no longer possible to finalise property settlement.  Instead assets are distributed according to the Will (which you may or may not have updated since separating) or by way of the ownership of the assets.  Even in the event that the deceased dies intestate it is possible (and likely) that the surviving (albeit ex-spouse) will benefit from the assets.  Such circumstances often give rise to more legal issues under the Probate and Administration Act.

Irrespective of whether or not you have an updated Will, without a property settlement, any assets that are owned as joint tenants (like your marital home) will be automatically transferred to the other joint tenant.  Jointly owned assets do not form part of the estate.

While you may have some ‘real’ excuses for delaying your property settlement it is apparent that this should never occur without close consideration of the risks associated with this delay.  Property settlements, no matter how tricky, are always best dealt with in a timely manner.

I left my husband 2 months ago without a single stick of furniture and just one suitcase of clothes.  I am happy for my ex to keep the house and all the furniture and contents.  I want to start afresh, with new stuff, without any reminders of my miserable marriage and old life.  I have receipts for most of the furniture so it should be easy for him to pay me half of what we originally paid and I can move on….right?

If only things were so easy.  Unfortunately, despite the fact that you have kept receipts for all your purchases, your ex will not be required by law to pay you for exactly half of the original cost for each item.  You see, furniture, in property settlements is valued according to the current second-hand value rather than what you paid for them, or what they are insured for.  These values are roughly calculated according to what an independent third party would be prepared to offer you if it were to be sold.  A good guide is to look at the cost of similar items for sale at second-hand stores or online through sites such as Gumtree or ebay.  In effect, contrary to the value of the furniture according to the receipts you have retained, these items will almost inevitably be valued at a fraction of this cost.  Additionally you also need to factor in that furniture, especially electronics in the day of changing technology do not hold their value.  The one exception to this is in the case of antiques or heirlooms which, despite age, may be of value.  In this case the items will need to be valued by a qualified appraiser.

In terms of the overall property settlement the Court does not place a great deal of emphasis upon second-hand furniture.  Generally the inherent value of second-hand furniture is deemed so small that is not worth the time (and money spent in legal costs) arguing over it.

While I can appreciate your need to ‘start afresh’ it is important that you undertake this with the understanding that what it is worth is far less than what is needed to replace the furniture.  With this in mind it is often preferable for both parties to reach some level of negotiation about who gets what.  After all, there is little point spending thousands in a legal fight over a table worth $50.

For legal advice and support in the event of a relationship break down speak to Joanna Diamantopoulos at Welden & Coluccio Lawyers.