When is the Right Time for a Family Law Property Settlement?

by James Crowther

RELATIONSHIPS can break down for a variety of reasons, and equally in as many various circumstances.

A common situation is the "out of the blue" announcement that one party is not in love with the other party anymore and wants to end the relationship. The other party can be totally devastated by this announcement which they did not see coming.

Apart from the initial shock there is usually a period of, if not panic, then something akin to it. Questions arise: Where are the kids and I going to live? How we will survive financially? Do I need to go back to work? Can I get a job now that I have not been in paid employment for a long time? Where and how will I get current workplace skills?

This can lead such a person to "freeze" and just want to leave things as they are for as long as possible. In this situation a party might decide not to initiate a settlement in the hope that their partner has taken temporary leave of their senses and, if given some time and space, will come back.

The other extreme is the "slow burn" situation where the parties have been unhappy for a considerable time but have stayed together, possibly "for the kids' sake." When separation finally occurs great damage has usually been done, particularly to the kids who have lived in an unhappy household.

So what is the right time? The simple answer is that there is no right time other than what is appropriate
in the particular circumstances of each individual matter. But what are the risks of delay in doing something? The Family Law Act 1975 (Cth) does not prescribe a time limit for a property settlement except where the parties have finalised a divorce. When they do divorce a property settlement must be commenced within 12 months of
the divorce. If they decide they want a property settlement and more than 12 months have elapsed since the divorce, then leave of the Court is required and the Court must be satisfied as to the reasons the applicant has sat on their hands and done nothing, and that not to grant leave will cause hardship.

Property settlements are based on the values of the items of property in the pool at the time of the settlement, not at the time of the separation. It should be noted that superannuation is classified as property and, if a party has membership of a fund that has strong growth then delay might mean giving half of that growth to the other party. The same problem can occur when one party wants to buy out the interest of the other in the former matrimonial home. It is better to deal with this issue sooner rather than later because delay means the party buying the interest pays more for the same interest, especially in a rising real estate market.

Another problem that can arise in delaying a property settlement is that one party might meet a new partner or marry. In those circumstances the assets and financial position of the third party becomes a relevant consideration in the property settlement. One of the considerations which must be factored into a property settlement is whether there needs to be an adjustment to one or other party to take account of what is often described as their future needs. So if a new relationship is formed then that will be a relevant factor in assessing future needs.

Regardless of the circumstances of the separation it is wise to seek initial legal advice at the earliest opportunity as to your rights and entitlements in your new environment. Knowledge is power. Not power over the other party but power to control your life and to be able to make the best decisions possible as to whether to initiate an early settlement or to wait.


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