Divorce is never easy. Beyond the emotional upheaval, there’s the complex legal process of separating your life from your former spouse’s. One crucial aspect is the division of assets, and unfortunately, it is common for many people to inadvertently make mistakes with lasting financial consequences. We understand that the division of assets can be stressful and complex. It can be helpful be helpful to have an experienced lawyer by your side to help guide you through the process when commencing a property settlement.
At Le Brun & Associates, we are committed to offering you support, advice and representation when you need it. We understand that every situation and relationship is unique, so we are available to offer you personalised advice when it comes to divorce and splitting assets.
Here are some tips at common errors to avoid when splitting assets during a divorce
1. Waiting until you are divorced to finalise your property settlement relationship
It is common misconception that separated spouses are to wait until they have obtained a divorce before finalising a property settlement. If you have obtained a divorce, it is vital to know that formally ending your marriage places a 12-month time limit from the date of divorce for married couples and a 24 month time limit for de-facto couples following the date of your separation to finalise your property settlement as well as spousal maintenance.
Should spouses or de-facto couples not finalise a property settlement within the prescribed time frame, you may lose your right to seek any further property settlement or entitlements pursuant to the Family Law Act 1975.
2. Not knowing what assets you have
Before you and your former spouse can divide your assets fairly, you will need to have a complete understanding of all your assets, financial resources you and your former spouse own.
This can include:
- Real Estate: Your home(s), land, investment properties, holiday homes;
- Financial Assets: Bank accounts, Investments, Shares, Superannuation (retirement savings);
- Business Interests: Ownership in any form or assets accrued during the relationship;
- Vehicles: Cars, trucks, boats, etc;
- Personal property: Jewellery, arts and antiques, collections;
- Household contents;
- Inheritances.
3. Underestimating the Value of Assets
We understand that it is common for spouses to be believe that property purchased prior to or during the relationship may be worth significantly more now. Businesses can be difficult to value. It is vital to obtain accurate appraisals and valuations for assets such as real estate, vehicles or valuables to ensure a fair division of assets, especially when you and your former spouse cannot consent to the value of assets. Sentimentality can cloud judgement. Likewise, be careful to not overvalue or undervalue your assets.
4. Feeling you should receive more in your property settlement as a result of your spouse’s infidelity
We often hear that following the discovery of a cheating spousal often provides a presumption that the aggrieved party to a relationship will be able to apportion blame to a party when obtaining a divorce, a higher distribution for a property settlement, spousal maintenance and child support as well as greater weight in determining parenting arrangements.
However in Australia, unlike some other countries, does not place blame on a party to the relationship or seek to understand the cause of the breakdown of the relationship. Accordingly, under the Family Law Act 1975 a “no-fault” jurisdiction exists. This means it does not need to be proved that a party to the relationship is considered to be “at fault” for the breakdown of the relationship.
As such, the cause of the breakdown of a relationship is not recognised by the Courts and therefore would not satisfy grounds for adjusting the division of assets in property settlement. However, whilst we note that infidelity is not a factor to be taken into account when determining a property settlement, the Court may adjust the property settlement upon the party’s behaviour during the relationship.
5. Letting Emotions Overrule Logic
Fighting to keep the former matrimonial home out of sentimentality may make emotional sense, but is it financially the best decision? Try to approach the division of assets with a clear head by focusing on the long-term needs rather than an immediate emotional satisfaction.
6. Not Considering Mediation
Following the breakdown of a relationship, it is easy to feel that court proceedings is the only way to achieve a just and equitable settlement. However, mediation can be a powerful and cost-effective alternative way to reach an agreement with your former spouse without resorting to protracted and costly court proceedings.
7. Not Seeking Professional Help
Divorce and the splitting of assets can be incredibly complex. At Le Brun & Associates we will protect your interests and ensure the process is followed correctly every step of the way. By being informed, prepared and seeking expert guidance from a family lawyer, you can increase your chances of a fair outcome and to safeguard your interests.
Tips to Protect Yourself:
- Get Legal Advice Early: A family lawyer is crucial for protecting your rights and achieving a fair outcome.
- Be Transparent: Don’t try to hide assets as this will significantly damage your case.
- Get Valuations: Appraise complex assets like homes or businesses as well as personal property in dispute;
- Formalise Agreements: Turn any settlement into a legally binding Consent Order or a Binding Financial Agreement.