Navigating Divorce in Melbourne: A Property Settlement Guide

Today’s topic: What is property settlement?

You see, we all know the fact that divorce can be an extremely emotionally overwhelming affair. And, on top of that, the legal division of property is often a cause of more pressure.

Knowing your rights and the property settlement process is the key for protecting your rights and maybe even getting some clarity in such a situation.

But how to do that?

Hi. In today’s blog, that is exactly what I will be talking about. In this article, I plan to introduce you to the steps of the family property settlement that you need to take when going through a divorce.

Apart from that, I will also explain:

• How you can do it in Melbourne under the Australian family law.
• The paperwork that you have to present.
• All the answers for expected questions.

Whether it’s a divorce or separation from a de facto relationship, this post will be your guide, making your life easier and providing the peace of mind you were probably looking for.

So, if that is what you want to know, keep on reading this blog till the end, and thank me later…

What is Property Settlement?

In Melbourne, divorce property settlement refers to the division of assets and liabilities between partners following the breakdown of a marriage or de facto relationship. This includes all types of property:

• Real estate
• Savings and investments
• Superannuation accounts
• Vehicles and jewellery
• Debts such as mortgages, credit cards, and personal loans.

The goal of a property settlement is to distribute these assets and debts equitably, not necessarily equally.

Each case is assessed individually under the Family Law Act 1975, and while some assume a 50/50 split is standard, this is rarely the case.

When Can You Begin The Property Settlement Process?

Property settlement can start any time after separation, which is once both parties stop living as a couple and have no intention of reconciling.

• Married couples have 12 months after a divorce order is granted to finalise a settlement.
• De facto couples have two years from the date of separation.

It is important to act within these legal timeframes or risk losing your entitlement to a fair settlement.

Key Steps in the Property Settlement Process

Here are the steps that you need to take when dealing with property settlement in divorce cases:

Step 1: Identify All Assets and Liabilities

Start by listing all assets and debts – whether jointly or individually owned – to help determine the total value of the property pool. Having this understanding is crucial before you start the settlement process, as it forms the basis of many decisions.

If you are unsure what assets are involved, seek assistance from a family lawyer or a financial advisor. They can help review financial documents, identify hidden assets, and provide legal support.

Step 2: Evaluate Each Party’s Contributions

Reflect on both partners’ contributions to the property pool throughout the relationship, including financial and non-financial, direct and indirect contributions, such as:

• Income and mortgage payments
• Home renovations or improvements
• Running a business without pay
• Childcare, homemaking, and domestic duties.

Step 3: Assess Future Needs

A fair settlement must also consider what each person may need in the future. Key factors include:

• Age and health
• Earning potential and income disparity
• Responsibility for children’s care.

It is important to be transparent with your ex-partner about your financial situation and needs for maintaining a decent standard of living.

If they are unwilling to provide financial support despite your reduced capacity to earn, you may apply to the court for spousal maintenance.

You will need to demonstrate both financial need and your ex-partner’s ability to provide support.

Step 4: Attempt Mediation

For some couples, mediation can be a drawn-out and trying process, but open and honest communication is crucial to achieving success. Mediation offers several benefits, including: 

• Acting as a neutral ground to facilitate discussions
• A more cost-effective option than court proceedings
• Faster process and legally supported under family law.

Ideally, both parties can reach a fair agreement through mediation. If not, at least expectations are clearer. However, if mediation fails, you may need to apply to the court for a decision. 

Step 5: Making the Agreement Official

Once an agreement is reached, it is essential to make it legally binding with the help of a family lawyer. Otherwise, either party may seek further claims in the future, even after the time limit has expired. 

A family lawyer can help legalise the settlement agreement via one of two ways: 

• Binding Financial Agreement (BFA)

Commonly referred to as a prenuptial agreement or prenup, this private contract outlines asset division and is signed by both parties after receiving independent legal advice. It can be done before, during, or after the relationship.

• Consent Order

This is a court-approved agreement that becomes legally binding once the court is satisfied it is just and equitable.

Important Documents to Prepare

Before meeting with your family lawyer, prepare the following documents:

• Marriage certificate and the separation date
• Children’s birth certificates
• Bank statements and investment records
• Superannuation documentation
• Insurance policies
• Loan and credit card statements.

Additionally, prepare a relationship timeline to help family lawyers evaluate your portion of the property pool. This should include:

• What property each party brought into the relationship
• Major purchases or sales during the relationship
• Significant financial or non-financial contributions.

Preparing a rough valuation of shared property and debts will also assist your lawyer in evaluating your entitlement. 

Questions People Often Ask About Property Settlement

Here are some questions that people often ask when dealing with property settlement in divorce cases:

Is Property Settlement Different From Divorce?

Yes. A divorce legally ends the marriage, while a property settlement deals with the process of severing the financial relationship between both parties by distributing the accumulated assets and liabilities. These are separate proceedings and do not occur automatically together. 

Who Gets The Family Home?

The family home may hold emotional value, which is understandable. However, the court focuses on fairness and decides based on:

• The total asset pool
• Contributions by each party
• Future needs (e.g. who has primary custody of children).

Options include:

• One party retains the home and compensates the other
• Selling the property and dividing the proceeds
• Court-ordered sale if no agreement is reached.

What If I Do Not Have Property In My Name?

Even if no property is under your name, you may still be entitled to a share of the property pool, especially if: 

• You have childcare responsibilities
• The relationship was long-term (longer than two years)
• You made financial or non-financial contributions to the relationship
• You do not have access to financial resources.

If your ex-partner owns the home, you may need to lodge a caveat on the property to prevent them from doing the following things. These include:

• Transferring ownership.
• Re-mortgaging.
• Selling before a settlement is finalised.

Consult your family lawyer promptly on the best course of action. 

Navigate Divorce Property Settlement With Confidence 

In Melbourne, knowing what your rights are and how the divorce property settlement process works will give you more power in going through this difficult time.

If you have all the necessary papers, legal advice, and a more qualified support team, you can take the first steps to solve the matter.

Be it an informal separation or a case where both individuals have petitioned for a divorce, its best to consult a lawyer.

A good family lawyer who is capable of handling the property settlement process at the earliest time.

In addition to the legal guidance, they will be able to make your interests their priority in every step of the process, thus eliminating the need for you to be in much pain at the time.

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