Financial Issues including property and Spousal Maintenance

Property

After separation, in the majority of cases, parties need to divide their assets and liabilities, so that each can be financially independent from from the other. When relationships break down, for most people, regardless as to whether the relationship is a marriage or a de facto relationship, the Family Law Act now deals with how property should be divided up. The Division of property is commonly called a "property settlement".

Maintenance

Maintenance is financial support paid by one party to the other in circumstances where the first party is unable to adequately support themself, and the second party has a demonstrable capacity to pay that support of the party, not children of the relationship.

If you are in need of financial support after the breakdown of a relationship, then you should obtain advice from a lawyer about whether you would be eligible for maintenance

 

FAQs

The Court considers both the needs of the Applicant for Maintenance and the other party's (the Respondent's) capacity to pay. Maintenance can be ordered either as an urgent payment, as ongoing periodic payments, or as a lump-sum, depending on  the parties' circumstances, and the income and assets available to satisfy the maintenance order. The same factors that the Court considers when looking at the parties future needs considered when deciding if Maintenance is payable.

Unlike applying for Divorce to bring an end to your legal relationship with your spouse, Dividing property can begin as soon as parties are ready to take those steps. Sometimes, because of the nature of the assets to be divided, this process may take some time. A common example is the family home, which may need to be sold for each party to receive their entitlements. Coordinating those arrangements, and preparing the property for sale may take some time, which means even if parties agree, there may be some delays because of the practicalities involved in realising the value of particular assets. 

Under the Family Law Act 1975 (Cth), the Family Law Courts have a broad discretion to adjust the ownership of property as between the separated parties. In most matters, the approach is described as having 4 steps:

  1. Determining the assets and liabilities of the parties, including superannuation;
  2. Examining each party's contributions, which includes financial as well as other contributions;
  3. Considering each party's future needs such as age, health, earning capacity and the care of children;
  4. Considering whether the actual division of assets is fair to both parties.

Under the Family Law Act, when parties' separate, as a starting point, each has a right to an adjustment of property. There is no presumption under Australian Law that parties have a right to an equal settlement of property. Instead, the Family Law Act provides that each party's entitlements to a property settlement is based on their contributions to that property, and any relevant future needs. Understanding what sort of contributions and future needs are taken into account, and how these affect your entitlements is advice you need from a lawyer.

  • For married parties, there are no time limits for the division of property unless the parties obtain a Divorce. Once parties are divorced, they have 12 months only from the date of the Divorce to apply for a property settlement.
  • For de-facto couples, a time limit of two years from the date of separation applies. This means parties must reach agreement and have the agreement documented within two years from the date of separation. Alternatively, if no agreement can be reached, then proceedings should be filed at Court within that two year limit.

If you have already reached agreement about your property should be divided,there are sound reasons why that agreement should be properly documented.

Two important examples include:

  1. Superannuation - this can only be divided by having a formal property settlement;
  2. Duties - some relief from stamp duty is available if assets are transferred between parties to a marriage/ de-facto relationship by way of a formal property settlement

A formal property settlement can be done using either Consent Orders, which are filed as an Application in the Family Court, or by having a Financial Agreement prepared. There are advantages and disadvantages to each of these options. Neither of these options require you or your former spouse/partner to go to Court or appear before a Judge. You should speak to a lawyer for advice about which of these options best suits your needs and budget.