What is a Divorce?
A Divorce is the legal recognition at the end of your marriage.
You can obtain a Divorce if your marriage has irretrievably broken down and you have been separated for no less than 12 months.
Despite popular belief, you do not have to prove who was “at fault” and you do not have to wait 12 months after you have separated to finalise your property settlement.
What is a de facto relationship?
There is no one “legal” definition of a de facto relationship as there are different requirements for different legal purposes.
However, generally-speaking, a de facto relationship is between 2 persons (not legally married) of the same or opposite sex who are not related by family and, having regard to all of the circumstances of the relationship, have a relationship of a couple living together on a genuine domestic basis.
What is child support/maintenance?
Immediately upon separation, you are able to lodge an Application with the Department of Human Services (Child Support) to have maintenance/support assessed for your child if you are unable to reach an agreement with the child’s other parent.
What is a Parenting Order?
A Parenting Order made by the Court typically deals with the following issues:
- Allocation of parental responsibility (i.e. all of the duties, powers and responsibilities and authority, which by law, parents have) in relation to the children (whether sole or joint);
- Who the children are to live with;
- Who the children are to spend time with;
- Any other aspect of the care, welfare and development of the children, or any other aspect of parental responsibility for the children.
When a Parenting Order is made, it is a legal requirement that parties follow the Order.
If a parent does not follow a Parenting Order (in the absence of providing a reasonable excuse), it is called “contravening” a Parenting Order.
There are serious ramifications which flow from a contravention of a Parenting Order such that it is possible for the Court to order parents to attend programs, facilitate “make up” time, enter a bond, pay a fine or even 12 months imprisonment.
It is therefore important that you read and understand the terms of a Parenting Order made by a Court.
How does a Court determine who the child shall live with/spend time with?
Despite popular belief, there are no “fixed” rules as to who a child shall live (formerly known as “custody”) and who a child shall spend time with (formerly known as “access”).
The Court’s paramount consideration in determining which parent the child shall live with, and how much time the child shall spend with the other parent, is what is in the “best interests of the child.”
The Family Law Act 1975 sets out the factors that are to be taken into account in determining the best interests of the child.
How does a Court determine a property settlement?
Contrary to popular belief, the process that the Court uses to determine a family law property settlement, is not a “mathematical” one.
Unlike other countries, there is no starting rebuttable presumption that the parties’ net property pool is divided “50/50.”
Each relationship is unique.
The Court has a wide discretion in making property settlement orders and consequently, outcomes can vary considerably.
In other words, you could potentially get 5 different outcomes before 5 different Judicial Officers on any given day at a Trial and each outcome would be acceptable, provided it falls within a range of possible outcomes.
In practice, the Court generally follows a long-standing process involving a number of steps in determining the entitlement of each party to a relationship.
These steps are as follows:
- The Court must decide if it would be just and equitable to adjust or change the parties’ current legal ownership of assets.
- To make a list of all of the current assets, liabilities and superannuation of each of the parties and arriving at a net figure, or what becomes known as the “net property pool”.
- To assess the contributions of each of the parties throughout the relationship, to the net property pool and to the welfare of the family. Contributions can be direct (eg. made by one of the parties’ to the relationship) or indirect (eg. made by one of the parties’ family members), financial (eg. earning an income) or non-financial (eg. renovations or improvements to a property done by one of the parties) or made as homemaker or parent. Each party’s contribution is assessed as a percentage or a range of percentages.
- To assess the current and future circumstances of each of the parties and make adjustments to the percentage arrived at in step 3. The list of factors in Section 75(2) of the Family Law Act 1975 must be considered. An example of some of the more common factors are:
- the age and state of health of each of the parties;
- the income earning capacity or discrepancy between the parties;
- the length of the relationship and its effect on each of the parties earning capacities; and
- who will have the primary care of the children into the future.
- For the Court to “step back” and assess whether the percentage or division achieved by application of the above 4 steps is appropriate or “just and equitable” in the circumstances.
What is spousal maintenance?
Spousal maintenance is money paid by one spouse (i.e. the paying spouse) to the other (i.e. the receiving spouse) in circumstances where the receiving spouse is unable to support themselves “adequately,” following separation.
In determining whether or not spousal maintenance is appropriate, the Court will consider the following:
- Whether the “threshold” is met (i.e. that there is a ‘need’ for one of the parties to be financially supported by the other);
- The capacity by the other party to support the first party for a period of time; and
- The matters in Section 75(2) of the Family Law Act 1975; and
- The extent of support required (what is ‘adequate’ in the circumstances) and the amount of time maintenance is required to be paid for.
What must be remembered, however, is that the Court is not required to ensure that either party has the same standard of living that they had before separation. It only has to be reasonable in all the circumstances.
Do I need to formalise my property settlement?
Upon separation, it is crucial to resolve the issue of property settlement and have any agreement formally recorded in a Consent Order (which is filed and approved by the Family Law Courts) or enter into a Binding Financial Agreement pursuant to the Family Law Act 1975 (“a BFA”).
Unless a property settlement is determined by a Court Order or is properly recorded in a Consent Order or a BFA, then the issue of property settlement is always potentially “alive” (subject to time constraints) and either party can commence proceedings in the future to make a claim against the other party.
There may also be costs savings and tax advantages in transferring property and signing documents pursuant to a Consent Order or a BFA. This includes capital gains tax and stamp duty exemptions.
Are there any time limits?
You must resolve or commence proceedings for property settlement and/or spousal maintenance within 12 months after you have obtained your Divorce.
Otherwise, you must seek leave of the Court to do so (which is only granted in exceptional circumstances). In our experience, this is a difficult, costly and lengthy process.
A financial claim at the end of a de facto relationship must be filed within 2 years after the date upon which the de facto relationship ended.
You can (and should) commence negotiations or file an Initiating Application for property settlement and/or spousal maintenance immediately upon separation from your spouse as a result of the irretrievable breakdown of your relationship.
Do I need to change my Will/Superannuation/Powers of Attorney or Enduring Powers of Attorney upon separation?
Upon separation, it is crucial to examine the terms of your Will (if you have one) or have a new Will prepared to properly reflect your change in circumstances.
It is also important to examine who is the named beneficiary in your Superannuation policy and whether you wish to change the beneficiary (as in many cases, this will be your spouse).
You should also examine any Powers of Attorney and/or Enduring Powers of Attorney you have put in place during your relationship. In most instances, it may be appropriate to revoke those Powers of Attorney immediately after separation.
If you wish to know more, please contact us on (07) 3211 4920 to arrange an initial appointment today.