It is a common assumption that parties have that you can not reach a financial settlement without being divorced and this is simply not true. For parties to reach a property settlement you and your spouse do not need to be divorced.
Securing a divorce and obtaining a property settlement are considered two separate matters for example, a divorce is an Order which is made by the Court which terminates a parties marriage. A divorce Order is not inclusive of Orders which are concerning to the property of the parties and does not sever the financial ties of the relationship. A property settlement is entered into independently of a Divorce Application and does not need to coincide with a divorce. If a property settlement is reached prior to the parties divorce, settlement can be finalised by entering into Consent Orders.
However, it is important to understand that if you and your spouse choose to apply for a divorce, and your divorce is granted, there is a time limitation of only 12 months from the date of your divorce to finalise a property settlement.
Why it’s important not to delay a property settlement?
The effects of a breakdown of a marriage are significant on the parties emotional wellbeing and it is usually in the interest of the parties for your property matters to be settled within a reasonable time after separating. Ideally, the parties should try and reach a property settlement within 12 months of separating. The longer parties delay addressing their property matter the harder it can become to reach an agreement.
This is in part due to the changes in your asset pool which occurs over time. Under the Family Law Act the approach to property settlement is that all assets and liabilities of both parties (also referred to as the property pool/net matrimonial asset pool) are taken into consideration at the time the parties are seeking property ordersand not at the time of separation.
It is extremely common that the value of assets post-separation varies and or additional property may be purchased by either or both parties. A new home which is purchased after separation, with post separation funds, and is in the sole name of one of the parties it would become a part of the combined property pool. Debt accumulated by one party post-separation is also taken into consideration and added to the parties property pool.
To avoid property settlements become increasing complicated we recommend a parties property settlement being done as soon as possible.
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