Six Common Mistakes about Divorce and Property Settlement in Australia

A marriage doesn’t finish when you get divorced. The end of a relationship often involves 3 major considerations:

  1. Divorce
  2. Property settlement
  3. Children

Six Common Mistakes about Divorce and Property Settlement in Australia


It is often that people who have no experience with Australian family law tend to fall into two extremes:

  1. One group may have the conception that property settlement is too complexed and costly. As such, in the effort to save money, they simply choose to skip this step.
  2. The other group of people may think that property settlement is an easy task. They may have listened to opinion of others or think that the parties are able to reach a simple agreement without the need for a lawyer or sign any finalised agreement.

However, the above misconceptions may lead to problems such as:

  • Failure to meet specific timelines
  • Failure to effectively divide property
  • Invalid and unenforceable agreement created
  • Disputes arising from “change of mind” situations


Six Common Mistakes about Divorce and Property Settlement in Australia


Here are six common mistakes regarding property settlement:


1. “I must end my relationship before property settlements can be done.”

This is not true. Getting divorced and formalising a property settlement are two separate legal issues. There is no need to wait until you are divorced to finalise your property settlement.

It is important to note that after a divorce, the division of property needs to be completed within 12 months of your divorce becoming final.


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

No!  ‘Property’ in family law includes a wide range of assets. This can include but is not limited to your house, savings, superannuation, cars, business interests and even inheritances. Importantly, it also includes any liabilities and debts.

In a property settlement, all assets and liabilities in sole or joint names are included in the pool for division. Find a non-exhaustive list here:

  • Cash and bank deposits
  • Jewellery and furniture, electrical appliances
  • Vehicle
  • Savings, shares, and insurance
  • Mortgages
  • Other rent or additional income
  • Various loans, credit card bills, debts, etc

In the division of property, the parties must fully and truthfully disclose their assets and liabilities. Otherwise the agreement made between parties may be overturned at a later date because of misrepresentation, fraud and incompleteness.


Six Common Mistakes about Divorce and Property Settlement in Australia


3. “Everything is split 50-50.”

 It is a common misunderstanding that in a property settlement, assets and debts are split 50-50 automatically after at the end of a relationship. This is not the case. There is no legal presumption that assets and liabilities will be equally divided.

There are 4 steps the court considers when determining a property settlement.

Six Common Mistakes about Divorce and Property Settlement in Australia


4. “My spouse cheated on me, so I should get more property.”

No. There are times where a divorce occurs due to infidelity. It is usual that the aggrieved party will believe that they should receive more in the property settlement.

Australia has a no fault divorce principle. This means that a court does not consider which partner was at fault in the marriage breakdown. You can apply for divorce as long as you satisfy the following:

  • the marriage has broken down and there is no reasonable likelihood that you will get back together
  • you and your spouse have been married for at least 2 years
  • you and your spouse have separated for at least 12 months and 1 day


5. “We have reached an agreement on the division of the property and have signed it, so we don’t need to find a lawyer anymore.”

There are various ways a property settlement can be done:

  • If you can reach an agreement, we can formalize your arrangement by
    • Signing Binding Financial Agreements
    • Applying for Consent Orders in the Family Court
  • If you cannot reach an agreement, you can apply to a court for Financial Orders, including orders relating to the division of property and payment of spousal maintenance.

While it may be possible for you to reach an agreement in writing with your former partner regarding financial issues, such an agreement is not legally binding. In other words, it can be overturned by any party.

A Binding Financial Agreement is only legally binding when:

  1. The Agreement is signed by both parties
  2. Before signing the Agreement, each party was provided with independent legal advice about the effect of the Agreement on their rights, as well as the advantages and disadvantages of making the Agreement
  3. After signing the Agreement, each party was provided with a signed statement by their lawyer confirming that advice was provided
  4. Signed copies of the two lawyers’ statements are exchanged between the parties
  5. The Agreement has not been terminated or set aside by the court


6. “Property I had before getting married should be mine after a breakdown of the relationship.”

This is not the case. Premarital assets are properties that are brought by a party to a marriage or de facto relationship. These can be in the form of financial sources, bank deposits, businesses, real estate or personal properties.

The court will consider premarital assets are contributions of a party and will be taken into account in the 4 step process listed above in a property settlement application.

You can ensure that your premarital assets are kept separate. This can be done through a prenuptial agreement. A prenuptial agreement can specify what property you want to remain as yours in the event of a relationship breakdown.


Six Common Mistakes about Divorce and Property Settlement in Australia


Are you or someone you know going through a divorce? Are you or someone you know thinking of applying for a division of property, spousal maintenance or need help with issues regarding parenting arrangements?

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


– End –

Special notice: This article is for informational purposes only and cannot be regarded as legal advice. Please contact us for specific advice tailored to your situation.

Related Posts