As the Legal GP, Mark Ryan is often engaged to formalise a division of assets around divorce or separation. In these cases, it’s important for parties to understand where and how a property settlement sits in the timeline of divorce or separation, and what they’ve agreed upon. Today’s blog aims to explain the relationship between divorce, separation and property settlements. Read on.
“Divorce” is the formal, legal termination of a civil contract of marriage and it is ‘no-fault’; meaning that the law/court does not consider why the marriage ended, rather granting a divorce because of “irretrievable breakdown”. This is the only ground for divorce in Australia. Irretrievable breakdown is established and acknowledged by the parties’ sworn statements of 12 months continuous separation – with allowance for ‘separation under one roof’.
Is divorce necessary to achieve a property settlement?
No. Divorce is not a requirement or pre-condition for a property settlement. The only legal reason to formally divorce is if one or both parties intend to remarry.
A property settlement can be negotiated and agreed upon at any time that suits the separated parties. However, property settlement court proceedings must be filed within two years of permanent separation or the relationship ending. Similarly, if a divorce is granted before a property settlement is achieved, court proceedings must commence within twelve months of the divorce – these time limits can be ignored if both parties consent.
Often after the relationship has ended, parties to a marriage (or non-married / ‘de-facto’ partners) will agree between themselves how they want to divide their property without taking any ‘legal action’. Whilst they are of course free to do so, their agreement is not legally binding and it is preferable and advisable to legally formalise their agreement to finalise their financial relationship ‘once and for all’.
Property settlements can be achieved in either of two ways; a Binding Financial Agreement or court Consent Orders.
- A Binding Financial Agreement can be made before, during or after the relationship and is enforced like any other contract. It is mandatory under the law that both parties obtain independent legal advice for it to be legally effective.
- Consent Orders are the terms of agreement enshrined as court orders. This option requires only one party to consult a lawyer; with the other party acknowledging that they could have, but elected not to obtain independent legal advice. This process is filed and completed in any Magistrates’ Court and enforceable like any other court order. There is no need for an appearance by either party or lawyer. As there is only one lawyer engaged, the parties are free to share one lawyer’s fees with their separated partner to reduce total costs for both parties.
Looking to learn more? As the Legal GP, Mark Ryan adopts an approachable, solutions-focused approach to family law – providing expert advice as you move towards a new stage of life. Do you require the support of an experienced, understanding local lawyer with your property settlement? Reach out here.