We look at the difference between divorce and separation, and what you should do to legally terminate the relationship.
If you are in a de facto relationship and separate then that is the final, legal separation (noting that you will have to formally separate your assets which we will discuss further). However, if you are married and you separate from your spouse then you legally remain married and you must apply to be granted a divorce to finalise your permanent separation.
What is divorce?
Divorce is the official (legal) termination or dissolution of a marriage by a Court.
How do you obtain a divorce?
You must complete and file an Application for Divorce with the Family or Federal Circuit Court. This Application can be completed jointly or solely (i.e. only one spouse applies) and then must be served on the other spouse.
In Australia there is only one ground for divorce, that the marriage has irretrievably broken down and to be granted a divorce you must show that you have been separated for a period of 12 months or more. There are other requirements if you have been married for less than 2 years or have separated under the same roof for part or all of the 12 months. A hearing will be scheduled which you may or may not be required to attend, depending on the individual circumstances and if the court grants your divorce it will be finalised one month and one day after the hearing date.
While a divorce terminates your marriage, it does not terminate your financial responsibilities and shared assets with your ex-spouse.
How do you divide your assets?
For both married and de facto couples this can be done by way of a property settlement.
If you are married, this can be finalised either prior to or after you have divorced.
Where you both agree as to the division of your assets, this can be either by an informal arrangement with your ex-partner which is NOT legally binding, or formally documented by way of Consent Orders or a Binding Financial Agreement. If you cannot reach agreement with your ex-partner then you can apply to the Court to make Orders.
To apply to the Court for Orders, there are time limits, 2 years from the date of separation for de facto relationships and 12 months from the date of divorce for married couples, unless there are extenuating circumstances and the Court grants you leave to bring an Application.
Why should you formally document the property settlement?
The value of all your assets and liabilities are taken at the time a property settlement is finalised, even if this is several years after the date of your separation and the court process rewards a “spender” and penalises a “saver”. If your ex-partner later determines that your informal settlement is not sufficient they may be able to apply to the Court. It is in your best interests to formally document and finalise your settlement as promptly as possible, particularly in circumstances where you hold substantial superannuation assets, have joint interests in a business or are both on the title to property.
What else do you need to do?
After separation it is also important to:
- make a new Will in contemplation of your separation and divorce;
- remove your ex-partner from any binding superannuation nomination; and
- if you are listed as joint tenants on a property title, seek the assistance of a conveyancer to change this to tenants in common. You should do this because if a joint tenant passes away, their interest automatically passes to the surviving joint tenant (who could be your ex-partner), rather than to their estate. See our article on the differences between Joint Tenancy and Tenants in Common.
