What is the difference between ‘divorce’ and ‘property settlement’?

It is a common belief that divorce and property settlement are the same thing, when in fact, they are completely separate procedures.

A divorce is the official ending of a marriage, which allows the parties to enter into a new marriage. The court does not need a reason to make a divorce order, such as infidelity. This is because the Australian Family Law Act 1975 has adopted a “no-fault” divorce principle. The only criteria is that the marriage has irretrievably broken down with no prospect of getting back together, which is evidenced by a 12-month separation.

A property settlement is a procedure of dividing assets and debts from the relationship. If you have a Divorce Order, you have a 12-month time limit to start your property settlement.

 

Half of everything

Another common misconception is that once you move in with your partner, they automatically become entitled to 50% of everything. This is not the case.

The Family Law Act 1975 looks at numerous considerations to weigh up how to adjust assets fairly when a de facto relationship breaks down. The first thing the court needs to know is whether you and your ex-partner were, in fact, in a de facto or ‘marriage-like’ relationship. If a couple lives together for less than two years, a court may not deem that a de facto relationship existed at all, as the length of the relationship was too short to consider it fair to make an adjustment of property. The amount of time you were together is not the only factor, but it is an important one. It also depends if the parties controlled their own finances independently, whether one party gave any substantial financial contributions that the other didn’t, and importantly – whether you had any children together. The less there is binding you and your ex-partner together (i.e. children, joint assets), the more likely a court will think that the parties should leave the relationship with what they came into it with.

This is why it is important to get prompt advice from a family law solicitor if you have separated from your partner, even if you were together for two years or less. Every person’s situation is different, especially if there are children. By explaining all of your individual circumstances to a family lawyer you can get specific advice to ensure you are informed about your rights, and your options.

 

My partner had an affair – do I get a higher property settlement, and sole custody of the children?

This is a query we often get from clients whose ex-partner have had an affair. As with divorce, property settlements are based on a “no-fault” principle in Australia, outlined in the Family Law Act 1975. A court cannot examine whose fault it was that the marriage broke down, only that it did in fact break down, which is proven by a 12-month separation. The facts or circumstances around the history of your relationship, or its breakdown, are relevant as far as they are of a broadly financial nature. A claim for a higher property settlement cannot be made on the grounds that they were not at fault in the marriage breakdown. Recent case law has examined the financial impact of domestic and family violence, in the context of spousal maintenance, however the “no-fault” remains an important general principle in family law in Australia.

Whilst we would prefer to think that our relationship won’t end up in court, it’s a reality that so many often do. To avoid the heartache and emotion of dividing assets and liabilities during a separation, it is a good idea that you and your partner discuss what assets each of you would keep, if it does happen. If you have a general agreement, this can be drafted into a Binding Financial Agreement by a family lawyer and save you heartache, and money, down the track. If you are considering this option, or have recently separated from your partner, contact Jerry Tucker at BELAW today for a confidential consultation.