Divorce is a challenging time, and navigating the division of property can add to the emotional and financial stress. In Queensland, property division is governed by the Family Law Act 1975, which applies to both married and de facto couples (including same-sex relationships). The law aims to ensure that both parties receive a fair distribution of assets and liabilities, depending on the unique circumstances of each case.
Property division involves the distribution of assets and liabilities accumulated during the relationship. These can include:
- Real estate (e.g., family home, investment properties)
- Bank accounts and cash
- Pensions
- Vehicles, furniture, and valuable personal belongings
- Businesses and investments
- Debts, including mortgages, credit cards, and loans (e.g., business, student)
It’s important to note that property acquired before or after the relationship may also be considered, unless a valid prenuptial agreement is in place protecting it from being distributed in a separation or divorce.
The court follows this four-step process to ensure that property is divided between the parties fairly:
- Identify and Value the Property: All assets and liabilities are identified and valued, regardless of whose name they are in. This includes property gained before, during, and after the relationship.
- Assess Contributions: The court evaluates both financial and non-financial contributions that each party has made while married. Financial contributions include income and assets brought into the relationship, while home-making and childcare are considered to be relevant non-financial contributions.
- Consider Future Needs: Someone’s age, health conditions, ability to earn a living, and caregiving responsibilities for dependent children are evaluated in order to determine what each party will need to live a financially secure lifestyle.
- Achieve a Just and Equitable Outcome: Based on the assessments listed above, the court decides on a division that is fair and reasonable for both parties.
Couples are encouraged to reach an agreement without court intervention. The options for this could include:
- Informal Agreements: While not legally binding, informal agreements can be a starting point. However, disputes can arise if one party denies the agreement was even made.
- Consent Orders: These are written agreements approved by the court, making them legally binding. The court will assess it to make sure that all regulations have been adhered to before enforcing it.
- Financial Agreements: Also known as Binding Financial Agreements, these can be made before, during, or after a relationship. They require independent legal advice for each party to be enforced.
What Happens if One or Both Parties Don’t Agree with the Outcome?
When parties cannot agree, an application can be made to the Federal Circuit and Family Court of Australia for property orders. Before filing, parties must:
- Attempt dispute resolution with mediation.
- Disclose everything they own (including financial, property, and business assets).
- Comply with procedures that must be followed before the court receives the application. Your legal representative will be able to clarify exactly what these involve.
Time limits to submit the application apply depending on the nature of the relationship:
- Married Couples: Applications must be made within 12 months of the divorce becoming final.
- De Facto Couples: Applications must be made within 2 years of separation. You should make a note of the exact date you decided to separate.
Extensions may be granted in some circumstances. These include whether one party could suffer financial hardship, children are involved, negotiations are ongoing, or a party is facing a serious illness that could affect their decision-making abilities.
Factors Influencing Property Division in Queensland
When determining how property should be divided after a divorce or separation, the Family Court of Australia assesses the unique circumstances of each case. Perhaps most importantly, the court does not take into account who was at fault for the breakdown of the relationship. Instead, it focuses on the contributions made during the marriage, the future needs of each party, whether there are any children involved, and any other factors deemed relevant.
Here’s a detailed look at the key factors that influence the division of property during a divorce:
- The Length of the Relationship: The duration of the relationship plays a significant role in determining how property is divided. The longer the relationship, the more likely it is that assets and liabilities accumulated during that time will be split equally among each party. For shorter relationships, the court may be more inclined to award each party assets that reflect their contributions to the relationship rather than an equal split.
- Contributions: The court assesses both financial contributions (such as assets, income, savings, and investments) and non-financial contributions (such as homemaking, childcare, and caring for family members) made by each party. In many cases, homemakers or primary carers are entitled to a share of property, even if they did not earn an income during the relationship, because their non-financial contributions are valued by the court.
- The Future Needs of Each Party: These include:
- Age: A younger person may be expected to re-enter the workforce or build wealth more easily than an older individual.
- Health: If one party has health issues that impact their ability to work, the court may adjust the division to ensure they are provided for.
- Income potential: If one party has significantly higher earning potential, the other may receive more property to maintain a reasonable lifestyle.
- Care and responsibility for children: A parent who has spent most of their time looking after children may need more resources, particularly if they cannot work full-time.
At Dam Lawyers, we specialise in family law and can guide you through the property division process while outlining your legal rights and obligations. Our experienced team is committed to achieving a fair outcome for you.
Contact us today for a confidential consultation.
