Going through a separation is daunting for both parties and any children they may have. Not only is it emotionally challenging, it also requires you and the other party to re-assess your position and adjust to a new life which will potentially involve relocating from where you live, severing financial ties and, more importantly, resolving care arrangements for the children to the relationship.
From a financial perspective, finalising your family law property settlement at the first available opportunity following your separation is always recommended to prevent costs that you could incur by delaying the matter to sever the financial relationship with your ex-partner at a later date.
Whilst property negotiations can prove to be confronting and difficult for parties to deal with especially when you are also addressing emotional issues resulting from the separation, it's imperative that you know the risks associated when you don't finalise your family law property settlement in a timely manner.
The Family Law Act 1975 promotes early property settlements by imposing time frames which require parties to start Court proceedings for property orders. The existence of these time frames is an avenue through which the Court encourages parties to resolve their family law property settlement matters within a practical time frame and provides certainty to parties. This is particularly beneficial in matters where one party is purposely evading the negotiation process and consequently delaying a property settlement.
The relevant time frames are:
- Married couples - Parties have 12 months after the divorce order becomes effective to finalise their property settlement and, if need be, commence proceedings to obtain property orders. The separation date doesn't activate the limitation period
- De facto couples - Within the two years after separation, parties must finalise their property settlement and, if need be, commence proceedings to obtain property orders.
By complying with the above time frames, parties satisfy the Court's jurisdiction to hear and determine the matter. However, in the event that you or the other party wishes to pursue a claim outside of the designated time frame, the relevant party must seek leave from the Court to begin proceedings. In determining whether or not to grant leave, the Court will assess whether a party will suffer hardship if the leave isn't granted.
It is essential that you also understand that the value of your assets, liabilities and superannuation are appraised as at the time of hearing or at the period of settlement negotiations in the Family Law jurisdiction. In addition, if you or the other party's financial circumstances change between separating and when negotiations begin and/or the matter is before the Court, any windfalls including lotto wins and inheritances may also be integrated in the property pool for future settlement negotiations or a Court hearing.
Bear in mind that each case is unique and the facts and circumstances of each party differ. For this reason, advice provided to you will be tailored accordingly, taking into account your specific needs and circumstances.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
