The perils of delaying your family law property settlement
- July 23, 2021
- Jennifer Hetherington
- 17 Comments
Updated:
This blog post has always been one of our most popular. With the rise in property prices in Australia – and particularly Queensland – since the start of the COVID-19 pandemic, it was timely to update it.
Reasons not to delay your family law property settlement
As a family lawyer it’s not uncommon for me to encounter people who wrongly believe that they cannot do their family law property settlement until they have finalised their divorce.
Or they just haven’t got around to it.
Here are important reasons why it is important to both finalise your family law property settlement as quickly as possible after separation and get divorced as soon as your 12 month time limit expires.
Until you are legally divorced, your spouse remains your spouse.
That means more than simply not being able to remarry. The main impact is what can happen on your death. If you don’t have a Will, your estranged spouse may still be considered to be your spouse for the purposes of succession law.
That means that they may receive an entitlement on your death.
If you don’t have a Will and want to make sure that your ex doesn’t get treated as if you were still playing happy families, then you need to get your family law property settlement done ASAP. Get started now.
But I have a will!
reat! That’s important – and even more important to update it after separation. But, even if you have a Will, until you are divorced, your former spouse may be able to make a claim under family provision legislation, as if they were still your spouse. Again, this basically means they can contest your will and may be treated by the court as if you were still a happy couple at the date of your death.
You might not think that you’ll care what happens after you die, but your children might! If you haven’t updated your will since separation or divorce, contact us to discuss how to do that.
Why is a divorce important? I'm not planning to remarry
Once you are formally divorced, even if you don’t change your will, in some states and territories in Australia, any gift to your former spouse in your Will, will be automatically invalid.
So, if you just haven’t got around to it, your divorce can protect your children’s inheritance.
The general issue of post-divorce property settlement is in focus after the Family Court heard a case involving a couple who were together for 17 years and had two children. The husband inherited a $715,000 property from his late brother’s estate three years after separation. A judge excluded the property from the asset pool and the woman appealed, and won.
The two best ways to protect yourself
The moral of this story is:
- get your divorce once the 12 month time limit has expired; and
- make sure you’ve got a valid Will that you update once you’ve separated
Do I have to wait until I am divorced to do a family law property settlement?
Some wrongly believe that they cannot do their property settlement until they have finalised their divorce. You can actually do it as soon as you like. Time limits apply after you are divorced.
Contrary to some incorrect beliefs floating around the community/internet/social media, your assets are not divided at the date of separation. They are divided at the date that orders are made.
That means, if you manage to negotiate a settlement with your ex, then all the assets would have to be disclosed in the documents to legally formalise your agreement are the assets that you have at the date that that consent orders are being signed.
So, if you win lotto, that can be included. If you buy another property, that can be included.
If you can’t reach a resolution and your matter goes to court, you could be waiting two to three years for a trial date, but the judge will still use the values of your assets and liabilities at the date that the matter is being heard in court.
What if my property value goes up after separation?
Unfortunately, whilst that delay was occurring, the housing market improved and therefore the value of the property increased. Other assets in the property pool did not increase at the same proportion, so every incremental increase in the value of the house made her desire to retain it less achievable.
If you’re in a rising property market, and you want to retain a property, it makes sense to try to get your property settlement done as quickly as possible, otherwise it may make it impossible to keep that house.
Is a house I bought after separation included in our property settlement?
What if it increases in value?
Any assets that you acquire after separation can be included in the property pool. If these increase in value, then the increased value is what goes in, not what you paid for it.
How can I protect an inheritance from a family law claim?
As well as assets you purchase, lottery wins, gifts, and inheritances received after separation are all part of the property pool.
In a recent case decided by the Full Court of the Family Court of Australia, the court said that a property the husband had inherited three years after separation was to be included in the property pool.
The Court made it very clear in the judgment that all property goes in.
Nothing is excluded or immune from the property pool. The question of what contributions have been made to that property will be considered, but if it is the only significant piece of property in a property pool then it can have far-reaching ramifications.
Prospective inheritances (that is, where the person who has made the will still has capacity to change that will and is alive) are not taken into account by the court.
If you have separated and think you might receive an inheritance in the next year or so, particularly if that might be a significant inheritance, then it would be a definite advantage to you to get your property settlement done quickly, otherwise the inheritance can form part of the property pool.
I don't want to go to Court
That’s the best attitude to have – it’s expensive and stressful and most people do not need a judge to make a decision for them.
We can help you reach a family law settlement without court.
Collaborative law offers an opportunity for you and your former spouse to negotiate an agreement respectfully, away from the courts, taking into account the interests and needs of all family members including your children.
You both sign a contract and commit to not going to court. The Collaborative process can resolve your family law property settlement in as little as three months and costs significantly less than taking your family law matter to court.
It is also the process most likely to result in you and your former partner having an amicable co-parenting relationship moving forward.
Mediation is compulsory in family law parenting matters, and is virtually compulsory in property matters. Even if you do file in court, you will inevitably be required to do mediation by your judge after your first court date.
It therefore makes sense to mediate before you decide to file court proceedings, as it has an incredibly good success rate. I am a mediator and firmly believe that for those matters where Collaborative law is not appropriate, mediation offers the next best process. There are options for fixed fee mediation which can give you certainty about your costs.
Depending on what needs to be undertaken in terms of any valuations and disclosure of documents, a mediation can be arranged and held within about a three-month period.
Arbitration is essentially “private judging”. I liken it to choosing to use a private hospital with a specialist of your choice, rather than being on the waiting list for a public hospital.
With arbitration, you get to choose an experienced family lawyer and accredited arbitrator at a time of your choosing. You avoid the two to three year delays in the Federal Circuit Court and Family Court of Australia, where you have no choice over which judge you will get.
You are also able to design your own arbitration process and agree to conduct the matter in a way that you and the other party agree, flexibility which is not available if you take your family law property settlement to court.
All three of these processes can have you concluding your matter within a period of about three months if everybody is motivated to move things along.
This results in significantly decreased legal fees over going through court, but also means that you can draw a line in the sand and move on and not face the issues that have been discussed above.
Any family lawyer who is not discussing these three options with you as being the best ways to conclude your family law property settlement instead of going to court, is perhaps not the person that you need in your corner.
Choose a collaborator, problem-solver and strategist – not a gladiator who will run up fees.
Finalise your property settlement and divorce as soon as possible
– get your divorce done once you’ve been separated for 12 months
– whether you were married or de facto, get the ball rolling on your property settlement as soon as you can after separation
What if my ex has already filed in the Family Court?
This doesn’t mean you can’t still reach an agreement.
The Family Court provides many opportunities to reach agreement and less than 5% of cases end up being decided by a judge on a final basis.
Most matters go to mediation which is a very effective way to reach a final property settlement agreement.
What's next?
For more information about family law property settlement check out our frequently asked questions, obtain confidential, personalised answers about your situation within minutes, or contact us for an appointment with a member of our experienced Brisbane family law team.
How do stop constant stonewalling and failure to submit financials for years as is happening to mr
Hi Hazara
In such a situation there are a number of tools that we use to force the other party to disclose.
If we can assist with your family law matter please get in touch: kristel@hetheringtonfamilylaw.com.au or (07) 3181 5553
Specific orders for disclosure are needed and if there is non-compliance, an application for punishment for breaching the order.
Hi, my ex and I are going to get a divorce very soon, within the next couple of months. The only asset we have is the family home , which myself and two children live in , children aged 27 , and 16 . My ex doesn’t particularly want anything when it comes to the house . To save going to court or doing anything such as property settlement, can he just sign it over to me ? I have paid the mortgage repayments out of my disability payment for approx 31/2 years now , and he has said all along that he doesn’t want any part of the house . I hope you can help.
Many thanks .
My husband and i are recently seperated. I am in the family home with our two adult sons. As i dont have c a job yet he is paying the bills. He lives in a 2 bed 2 bath appartment at southbank costing $490.00 a week. We own our house and i would like to divorce next year in march when our 12 month seperation is up. My husband doesnt want to sell the house until our sons have finished uni .moved out and the market has improved. Can we still divorce and delay the sale of the house. Thankyou
What if I have agreed to everything. They are getting a higher percentage. Not based on anything except their desire to hurt me. But I’ve agreed to get it settled so I can move on. I’m talking about millions of dollars too. But they will won’t sign. Just because it’s the only control they have left.
Hi Jules
I’m sorry to hear you are going through this. Unfortunately sometimes people do drag things out to perpetuate a cycle of coercive control. Sometimes a circuit breaker is needed like starting court proceedings. It doesn’t mean you won’t still settle out of court, but it forces the other person to the table, so to speak.
Hi,
I’m in NSW. Have been separated for over 4 years. Have had a solicitor acting on my behalf for nearly the last 12 months. I have already paid them thousands of dollars and yet nothing at all has been achieved regarding a property settlement. The latest according to my solicitors is the firm representing my ex is not replying to any correspondence (I made an offer to the ex). My solicitors have told me that they suspect he is not giving his solicitors instructions and there is nothing further they can do. They have told me I have 2 options. 1. Deal with him directly myself (this is not even an option – it was an abusive relationship). 2. Take the matter to court but it will cost me upto $50,000 up front in costs – money I do not have. I have collected my files from the solicitors. I am at my wits end – how can I get this nightmare to end?
Hi Leah
Sorry for not responding earlier – our spam filter was catching comments! We work with companies who will loan you funds until you receive your settlement. You can also potential apply for your ex to pay money to meet your legal fees in advance. Please get in touch if you would like some specific advice
Is it possible for an ex husband to re take assets or finance given over to the other spouse ect after consent orders being finalised within 12 months prior to divorce or after divorce eg in the 12 months after divorce being finalised, even if prior to that divorce the assets ect were divided via consent orders, binding finacial agreement and seperation agreement ect.
Hi nm
Orders and financial agreements are supposed to be final, but there are always exceptions. I recommend getting some specific advice
I have been trying to get the ball rolling to settle assets for 3 months now only to continue hearing that my former partner has left messages for her solicitor, solicitor will be in contact over next few days etc. and this has been a fortnightly conversation with her since March 6th. Is there a way I can get the ball rolling faster than this because at this stage this will drag on forever.
Thanks in advance.
Hi Jayson
It sounds like you need a strategy for how to get some progress on your matter. Feel free to contact us info@divorcehub.com.au if you would like to make an appointment to speak with one of our specialist family lawyers
Hi. I’m in WA trying to finalise paperwork before going to any courts. He’s taken back his previous offers and refuses to negotiate anything. Everytime we give a certain date he comes back to give me a final date to agree with. Lots of back and forth games. This is his control. After 37 years together and 4 adult children who don’t talk to him he wants to punish them and myself by not giving what I put into the house. Which was partly my inheritance to get it to where it is today. Can he retract his offers or am I right in thinking it’s his way or the highway? I’m hoping for a 58% to 42% in my favour. He was after all using our company money which I too was a Director of for his affairs and for illicit acts all around the state and has admitted this to me and the 2 younger children. The company is sold and only the building and house remains. @ signatures are in place with the monies held in the bank.Any clues as this is very expensive and I’m running out of money and patience. This has been going on now for nearly 3 years.
Hi RM
I’m sorry to hear this – it sounds like coercive control. A different approach may be needed if it’s been 3 years and you still don’t have an outcome.
Hello,
My ex (we have one 25 yr old daughter living independently) is dragging out the property settlement process either by ignoring offers (despite his lawyer saying one is coming – I think he withdraws offers) or by making a counter-offer a week after the expiration of the offer. He is under an IVO for stalking (illegally accessing my FBook, emails, text messages, setting up video in house without my knowledge. He’s an IT engineer.) He’s been arrested, on bail pending criminal charges and hearing (assuming Police Prosecutor/DPP determines there is enough evidence to proceed etc). My question is more general: with all of this happening, would it not be better for him to settle the property? I assume he has a criminal lawyer as well, would they be advising him not to settle and how might that benefit him? Best, Kate.
Hi Kate
Unfortunately litigation abuse is a form of family violence. Perpetrators of coercive controlling abuse use the litigation process to perpetuate their abuse. You may well be experiencing this.
Get in touch if you want to work with us to develop some different strategies