The Perils of Delaying Your Family Law Property Settlement

As a family lawyer it’s not uncommon for me to encounter people who believe that they cannot do their family law property settlement until they have finalised their divorce. It is important to finalise your family law property settlement as quickly as possible after separation, you can do it as soon as you like, and get divorced as soon as your 12 month time limit expires.

Until you are legally divorced, you spouse remains your spouse. The main impact of what can happen on your death if you don’t have a Will is your estranged spouse may still be considered to be your spouse, and potentially receive an entitlement on your death. If you don’t have a Will and want to make sure that your ex doesn’t get treated as if you were still playing happy families, then you need to get your family law property settlement done ASAP.

If you already have a Will, that’s great, but it’s important to update it after your separation. Even if you have a Will, until you are divorced, your former spouse may be able to make a claim under family provision legislation, as if they were still your spouse. Again, this basically means they can contest your will and may be treated by the court as if you were still a happy couple at the date of your death.

You might not think that you’ll care what happens after you die, but your children might! If you haven’t updated your Will since separation or divorce, contact us  to discuss how to do that.

Why is a divorce important?  I’m not planning to remarry.

Once you are formally divorced, even if you don’t change your Will, in some states and territories in Australia, any gift to your former spouse in your Will, will be automatically invalid. Your divorce can protect your children’s inheritance.

The general issue of post-divorce property settlement is in focus after the Family Court heard a case involving a couple who were together for 17 years and had two children. The husband inherited a $715,000 property from his late brother’s estate three years after separation. A judge excluded the property from the asset pool and the woman appealed, and won.

The moral of this story is:

  1. Get your divorce once the 12 month time limit has expired;  and
  2. Make sure you’ve got a valid Will that you update once you’ve separated

Dividing assets can prove to be an emotional time. Contrary to some incorrect beliefs, your assets are not divided at the date of separation. They are divided at the date that orders are made.

Any assets that you acquire after separation can be included. If these increase in   value, then the increased value is what goes in, not what you paid for it. It also includes lottery wins, gifts, and inheritances.

If you manage to negotiate a settlement with your ex, then all of the assets would have to be disclosed in the documents to legally formalise your agreement are the assets that you have at the date that that consent orders are being signed.

If you can’t reach a resolution and your matter goes to court, you could be waiting two to three years for a trial date, but the judge will still use the values of your assets and liabilities at the date that the matter is being heard in court.

If you have recently separated and require legal assistance to organise your property settlement and your divorce, please contact our office and make an appointment with Kevin Murray.

Walker PenderThe Perils of Delaying Your Family Law Property Settlement