When a marriage or de facto relationship comes to an end, dealing with matters involving property distribution becomes an essential consideration for the parties involved. There are many options that can be undertaken when trying to settle property such as negotiating privately with a former partner.
Is there a formal process that must be followed in relation to private property settlement?
There is no legal requirement for the parties to settle any financial or property matters in a certain way, such as making an application to the courts or the submission of particular forms.
When attempting to settle property, the process can be done privately between the parties via the family dispute resolution process, or with the assistance of lawyers. Any agreement reached can also be formalised in a number of ways in which the Family Law Act 1975 (Cth) (the Act) is able to provide.
Furthermore, there is no set percentage in which property is to be distributed and can either be split evenly, or theoretically, one of the parties can also acquire 100 percent of the assets. Alternatively, neither party can hold any assets and instead choose to give all of the assets in the relationship to other parties.
Should private agreements be formalised?
It should be reemphasised that there is no requirement to formalise any agreement reached privately. However, one of the disadvantages in not formalising an agreement is that the agreement may not be legally enforceable.
What if one party is dissatisfied with the private agreement?
For any party who may become dissatisfied with the private agreement, an application can be made altering the whole agreement up to 12 months after the divorce, or two years after the conclusion of a de facto relationship. However, in instances where the property division is obviously unfair and is causing hardship, permission may be sought from the courts to re-consider the matter – even for applications that are out of time.
Some things to consider for any parties wishing to undertake private settlement
Take stock of all finances: it’s essential to draw up a list of all assets and liabilities that may be subject to property settlement, including any property beyond big ticket items such as property or cars. In addition to any personal assets, it may also be useful to take a look at the global pool of assets and liabilities, with the ultimate aim of reaching an agreed value.
The negotiation process: after evaluating all assets and liabilities, all parties may be able to make a determination in relation to their negotiating positions and may consider creating a Distribution List. Additionally, any decisions agreed upon by the parties can be written down. Negotiations can either take a broad approach or it can be done by an asset-by-asset basis.
The agreement: it may be a good idea to discuss whether to formalise the terms of settlement such as a consent order if an agreement is reached. Additionally, once an agreement is at hand, it’s a good idea to have a discussion with your solicitor about the terms of settlement.