If you and your spouse or your de-facto partner decide to separate it is imperative that you seek out legal advice in regard to a formal property settlement to not only protect your assets but also to protect yourself from your estranged partner’s liabilities. The Commonwealth Family Law Act 1975 governs the legal aspects of property settlements.
The High Court case of Stanford highlights the principle that a party has no automatic right to division of assets. The overarching consideration therefore is whether it is “just and equitable” to make property orders in the first place.
If it is indeed just and equitable to proceed with a property settlement, parties’ current assets and liabilities are identified and valued and form part of the matrimonial pool. Whether parties have access to any financial resources such as income from family trusts or companies for example, this is also taken into consideration.
Assets will include real property such as residential and rural land, shares in companies and business assets, as well as cars, cash in bank accounts, and superannuation funds. Liabilities might include home mortgages, personal loans, hire/finance arrangements and credit card debts. The assets and liabilities can be held in one party’s name or in joint names, and are all added into the matrimonial pool.
In respect of assets acquired prior to marriage or cohabitation, or in relation to an inheritance or asset gifted to a party late in a marriage or post separation, the court may still take these into consideration when assessing the matrimonial pool of assets.
The courts also understand that parties need to continue paying bills and operating businesses until property settlements are finalised. Nonetheless the court will be critical of parties who attempt to dispose of assets and or recklessly use funds or waste funds for instance to diminish the matrimonial pool of assets.
Ultimately, the court must ensure that the final orders are also “just and equitable”, or in other words, fair and reasonable in light of all the unique circumstances of the matter.
As you can see, a property settlement is essential in order to deal with, and in order to finalise, the legal interests of the parties.
At Everingham Solomons we have the expertise and experience to assist you with property settlements and any other family law matter because Helping You is Our Business.
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