When a relationship ends, often there are property and assets that need to be divided fairly between you and your former partner.
There are a few different ways you can come to an agreement over the division of property and a property settlement without going to court is certainly more economical. But before you take the first steps it is a good idea to understand what assets will form part of any agreement.
What assets can be divided
In the eyes of the law, property that can be divided under a divorce includes assets acquired before, during and after the relationship. This means that property you or your ex partner brought into the relationship AND property acquired after the relationship ended may be included in the property settlement, in addition to the assets acquired during the relationship.
Property is defined as including:
- houses and land
- businesses and companies
- lifestyle assets such as cars, boats, caravans etc
- cash and investments
- gifts, inheritances and lottery winnings
- furniture and household items
- Loans and debts
- compensation payments
Whether any of these assets are held in your name, joint names or your former partner’s name does not have any bearing on whether the asset forms part of the property settlement – they are all considered to be part of the asset pool, which can therefore be divided.
Coming to an agreement on property settlement without going to court
If you wish to avoid court and reduce legal costs, you may be able to come to an agreement with your former partner on property settlement without going to court. There are three accepted agreement methods you can use without going to court.
You and your former spouse can draw up an informal agreement detailing how your property will be divided.
It is important to note that informal agreements are not legally binding. This means that if you or your former partner fail to follow the agreement, nothing can be done to legally enforce it.
For this reason, informal agreements are generally not desirable, especially if you do not have a good relationship with your former partner.
If you can come to a fair property agreement with your ex partner, you can apply to the court for consent orders. In this instance, the court will review your agreement and if is fair, a consent order will be issued and the agreement will become legally binding. Once the consent orders have been issued no further claims can be made by either party in the future.
As consent orders require an application to the court and the agreement will become binding, it is a good idea to seek legal advice early. We can help you determine what is fair and assist you in lodging your agreement with the courts.
Binding financial agreements
Binding financial agreements can be made before, during or after a relationship.
In order for the agreement to become legally binding, you must seek legal advice and receive a certificate substantiating this. At least one of you must also sign a separation declaration. We can assist you in creating your binding financial agreement and ensuring it meets these requirements.
The courts are not required to approve binding financial agreements in order for them to be enforceable. However if at some point you do need to enforce the agreement, you will need to prove it was legally binding by providing the certificate and declaration above.
If you are unable to come to an agreement
If you and you ex partner are unable to come to a fair property settlement via an informal agreement, consent orders or a binding financial agreement, you will need to go through the courts to settle your matter.
Refer to our Property settlements through the courts article for further information.
For more information regarding property settlements, get in touch with Burbank & Brown.