Whether you are married or de facto, you may find yourself dealing with property settlements if you separate.
How do you split property after separation?
There is no mathematical formula for dividing property between parties. Every relationship situation is unique, so property settlement splits reflect this.
There are four common steps to working out a property settlement:
- Identify all the assets, liabilities and superannuation (and their values) that form the relationship’s asset pool.
- Assess the contributions of both parties to the asset pool.
- Assess the current and future circumstances of each party.
- Evaluate whether the property settlement agreement is ‘just and equitable.’
There are risks associated with not legally formalising your property settlement at the earliest opportunity, which include:
- Asset pool changes – The property pool (your assets, liabilities, and superannuation) is determined when you sign the property settlement, instead of your separation date. So, if one party acquires further assets post-separation and/or the assets increase in value, these may still be factored into the asset pool.
- People change their minds – It is better to divide the asset pool when you are still on reasonable terms.
- Stamp duty/capital gains tax (CGT) relief – You may be able to avoid paying stamp duty or CGT if you transfer the property to your former partner through a court order or a binding financial agreement.
- New partners – It’s important to note that if you don’t finalise your property settlement before you or your partner gain a new de-facto partner, the new partners might be entitled to make a claim against you or your former partner’s assets.
Property settlement time limits
There are time limits on property settlements after a separation. Thankfully, married couples do not have to be divorced to start negotiations on a property settlement. However, once you finalise your divorce, you must resolve your property settlement (or start the court proceedings for property orders) within 12 months. Those in a de facto relationship have two years to file a property settlement from their separation date.
Seek legal advice for property settlements
Without a doubt, there is a lot to consider when negotiating your property settlement after a relationship split. Seeking advice from experienced family or property lawyers will ensure your best interests are first and foremost.
If you are separated, looking to separate, or in the process of a divorce, contact Geelong’s best family and property lawyers to finalise your property settlement.
As a full-service legal firm on the Bellarine Peninsula, we are able to help you with all your family and property matters in one location. Contact us on 03 5222 2077 or email email@example.com to set up your confidential discussion.