There is no denying that separating from a long-term partner is among the toughest life experiences a person can go through. As well as dealing with the emotional fallout, you will likely encounter other practical issues such as organising finances, where you’re going to live and how to take care of your children.
But ever since the onset of the COVID-19 pandemic, it is clear that separating couples are facing additional challenges. In particular, restrictions on gathering and moving between different places mean that property or financial settlement negotiations cannot take place in person.
In this article, we’ll outline the property settlement process and help you better understand your options when it comes to finalising an agreement during COVID-19.
What is Property Settlement?
Property Settlement refers to the process of determining how assets and liabilities of the relationship will be divided between parties upon separation.
By law, there is no set formula to help you determine how property will be shared. Instead, how you agree to handle your financial matters will generally depend on your own unique circumstances.
When contemplating the property split, you should consider the following to help you arrive at a just and equitable solution:-
- The assets you own (including superannuation entitlements) and any debt owed on them;
- Your direct financial contributions to the relationship, such as renovations or property improvement;
- Your non-financial contributions to the relationship, such as care of children, household duties or partner support;
- Any gifts and inheritances;
- Your future requirements and needs
Why is Property Settlement Important?
Over the course of your relationship, you may have shared a joint bank account, purchased a property or even raised children together.
Formalising a Property Settlement is an important step towards finalising the financial relationship between you and your former partner.
By severing the financial ties, you can move on with your life with the certainty that the property you hold is yours to do with as you wish.
Once settled, your Agreement effectively locks the door to the Family Court and prevents your former partner from bringing a claim against you if they change their mind years down the track.
How to speak to your partner about Property Settlement
We recognise that it can sometimes be awkward to approach the subject of Property Settlement with your partner, especially if one of you is in a better financial position. It is therefore a good idea to approach the subject gently in order to reach an amicable solution.
Ensure the timing is right
Let your partner know you have something important to discuss and schedule a suitable time to chat when you are both calm and distraction-free.
You should avoid any temptation to surprise your partner by presenting them with an Agreement you have drawn up without their knowledge. Not only is this a sure-fire way to send them running for the hills, but it also attracts certain legal implications. For example, a court can set aside an Agreement if evidence suggests it was made under undue pressure or duress.
Don’t try to cover everything at once. If the discussion becomes emotional or heated, agree to stop and meet again at another time. Having regular short meetings is more ideal because it gives both parties the chance to digest what has been discussed without becoming too overwhelmed.
It is normal to expect that these discussions will continue over a period of time. Your initial negotiations might be broader or more philosophical as you come to an agreement about why the document is required. Once you have that meeting of the minds, you can then start fleshing out the specific details.
Stay calm, fair and respectful
Talking about finances can make people emotional, especially if they feel like their security is under threat. Therefore, you should endeavour to remain calm and respectful towards each other at all times.
If you find things become heated, take a step back to remind one another that you are in this together and ultimately working towards a fair outcome.
How to document a Property Settlement
There are several ways a couple may choose to finalise their financial affairs.
- Private Agreement – whereby parties are not legally obligated to carry out its terms;
- Financial Agreement – which establishes a private and legally enforceable arrangement between parties;
- Consent orders – which must be submitted to the Family Court for approval; and
- Property adjustment court orders – whereby an agreement cannot be reached and the court must intervene to make orders based on the evidence before it
There is no legal requirement to formally document a financial settlement after a marriage or de facto relationship ends. For this reason, some couples may consider the option of forming a private Agreement. Suppose you jointly own the family home and there are few items of valuable personal property. Each party may simply decide to retain their respective assets and go merrily in separate directions. However, this kind of handshake deal relies on good faith and will not prevent either party from applying for financial orders under the Family Law Act.
In light of the remaining options, parties should also be aware that the Covid 19 crisis is having a particularly profound impact on courts all across the country. While the Family Court and Federal Circuit Courts continue to operate, most non-urgent matters are being postponed to a later hearing date. This has caused a build-up of delays and prevented many couples from obtaining approval or an order from the court.
The pandemic has also created barriers to accessing legal assistance.
Like many businesses across the country, law firms are taking active steps to limit face-to-face time with clients. In Victoria, the current stage 4 lockdown prevents a client from attending their practitioner’s office because it does not fall within one of the five essential reasons to leave home.
In light of these considerations, financial agreements are by far the most economical option for legally documenting your Property Settlement in the current climate. They are perfect for couples who can still communicate and wish to have the final say on the division of their assets without involving the court.
How to negotiate a Property Settlement during times of uncertainty and Covid-19
Our Legal Review Service involves a referral to qualified independent Australian lawyers who will provide proper legal advice in relation to your draft Financial Agreement.
Our business model has various features that benefit separating couples, particularly in these unprecedented, strange and uncertain times.
Easy to access legal advice
To ensure your Financial Agreement is legally binding, both parties must consult with separate independent lawyers. Our Legal Review Service allows you to do this over the phone and via email from the comfort of your home or office.
The lawyers we partner with are specially selected because they have years of family law experience. By taking the peaceful path, you can expect expert advice and a high-quality document – just as if you had walked into a lawyer’s office and asked them to draft your Agreement from scratch.
Each kit includes easy to follow instructions, a completed sample agreement and additional sample clauses so you can finalise your property settlement in a breeze.
Our comprehensive Users Guide helps to set out all the recitals and provisions contained in the template Agreement. We’ve provided clear instructions to enable you and your partner to decide whether a specific paragraph should remain in the Agreement or whether it can be deleted. There is also the option to add extra recitals to better reflect your own circumstances if you feel it is necessary.
Fully editable template
The template Agreement provides the basic framework for your property settlement. Our fully secured e-commerce system allows you to purchase and download your document in an easy to edit Word format. This means that when negotiating with your partner, you can email it back and forth or work on it together if you are still living together under one roof.
Our unique method has been tested and proven by thousands of couples around Australia (and overseas) to be cost-effective and legally robust. You can check out the feedback submitted by customers who have used our Legal Review Package here.
Friendly customer support
Here at RP Emery, we are not just a faceless website. Instead, we consider it our job to provide you with the best possible support so you feel empowered to take control of your legal matters.
With years of experience helping couples create Binding Financial Agreements, we have a deep knowledge of our contracts and how they relate to the relevant legislation. Should you need assistance or specific advice in relation to your Agreement, we’re always happy to chat.