6 common mistakes about divorce and property settlement in Australia

6 common mistakes about divorce and property settlement in Australia

Published on 16 March 2021
Last updated on 1 February 2024

Separation and divorce can be a stressful event for all parties involved. With emotions running high, navigating through the family court system can be an overwhelming and unpleasant experience.

The division of property is a complicated but necessary step in almost all separation and divorce cases. Due to the complexity of the family court system, this has led to many misunderstandings and misconceptions surrounding separation, divorce and property settlement. Here are six common misconceptions regarding separation, divorce and property settlement:


1. “I must divorce/ separate with my partner before I can do property settlement.”

This is not true. You do not have to settle your divorce or separation to formalize the property settlement. You can apply for and finalize a property settlement before, during, or after the divorce or separation.

You should note the deadlines applicable for the completion of property settlements.

For previously married couples, the property settlement must be finalized within twelve (12) months from the date of divorce.

For couples previously in a de-facto relationship, the property settlement must be finalized within twenty-four (24) months from the date of separation.


2. “The only property we need to divide is our house”

‘Property’ encompasses a wide range of assets including all assets and liabilities belonging to the couple, and not only just the family home or mortgage.

In property settlement, all assets and liabilities in sole or joint names are include in the pool of division. These include, but not limited to:

  • Cash and bank deposits
  • Jewellery and furniture, electrical appliances
  • vehicle
  • Stock, bond and deposit insurance
  • pension
  • Company and family trusts
  • Other rent or additional income
  • Various loan and credit card bills

Both parties are required to disclose all their assets and liabilities that they own, including those the other party may be unaware of. Otherwise, the property settlement agreement made between the parties may be set aside for reason of misrepresentation, fraud, or incompleteness.


3. “I will not get anything from settlement because the house or car is not in my name.”

In property settlement, all assets and liabilities are included in the pool of division. This includes assets and liabilities owned individually or by both parties to the marital or de-facto relationship.


Six Common Mistakes about Divorce and Property Settlement in Australia


4. “I deserve more because my spouse cheated on me during marriage.”

Not necessarily. An aggrieved is not entitled to greater shares simply because the relationship has ended due to infidelity. Furthermore, the aggrieved may often mistakenly believe that property settlement is a means of punishing or holding their partner accountable for their behaviour.

In Australia, the ‘no-fault’ family system envisions that the division of property operates in accordance with principles of fairness and justice. Therefore, moral considerations such as infidelity or who is responsible for the breakdown of relationship is irrelevant to decision of property settlement.

Instead, the key considerations of property divisions include:

  • length of the relationship
  • age and health of each party
  • future earnings of each part
  • direct and indirect financial contribution that each party made to the family during the relationship
  • future financial assistance of each party


5. “My partner and I have reached an agreement regarding property settlement and have signed it, so we do not need a lawyer.”

A property settlement agreement must comply with the Family Law Act 1975  in order to be binding on the other party. Even if the document has been signed by both parties and witnessed by a Justice of the Peace, an informal agreement will not prevent the other party from returning at a later date and claim for further assets or payment.

There are several ways to ensure that the agreement of property settlement is binding:

  • If you have reached an agreement, you can formalize the agreement by:
    • Signing a Binding Financial Agreement; or
    • Applying for Consent Orders in the Family Court.
  • If you cannot reach an agreement, you can seek to apply to a court for Financial Orders, including orders relating to property division or payment of spousal maintenance.

A binding financial agreement, or ‘prenup’, is a private agreement between parties that sets out how the property or financial resources is to be divided. On the other hand, a consent order is written agreement between parties that have been approved by the courts. For more information, you may consider reading our article on binding financial agreements vs consent orders.


6. “The assets I owned before marriage will remain mine after the divorce / separation.”

Not always. Pre-marital assets brought into the relationship can form part of the property pool. In the event of a divorce or separation, these assets may be at risk of being distributed as part of the property settlement.

To avoid this, couples may prepare prenuptial agreements prior to marriage to determine what assets each party will keep following an event of a breakdown in relationship.


7. Conclusion

Are you or someone that you know going through a divorce? Are you or someone you contemplating of applying for a division of property?

Let us be your worry-free solution and work alongside with you throughout this trying time. As each couple and matter is different, contact professional family lawyers at Ascent Lawyers for personalized tailored advice.

Disclaimer: Ascent Lawyers owns all copyright in the text. This article is of a general nature and should not be regarded as legal advice or relied on for assistance in any particular circumstance or emergency situation. To obtain legal advice in relation to your own circumstances, please contact us for consultation.

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