When it comes to divorce and property, many of our clients have lots of questions about how the process of dividing property and other assets works. So our divorce lawyers in Perth have put together a guide on what you should know when it comes to divorce and property.
Dividing Your Financial Assets
Financial assets are defined as all assets and debts owned by both partners regardless of whose names they are registered in.
They include property such as your family home, cash, bank accounts, investments, businesses, insurance policies, superannuation, inheritances, vehicles and personal assets.
It also includes all of your debts such as your mortgage, loans, credit card or other personal debt.
If a Binding Financial Agreement exists, it will certainly simplify things, but dividing assets after any relationship breakdown is never easy, as there are bound to be some points of contention. As each marriage comes with its own unique circumstances, divorcing couples should try to agree on as many issues as possible paving the way for a smoother resolution, whether done through the courts or through mediation.
Who Pays The Mortgage After Separation?
There is no one hard and fast rule that applies to every case, and both spouses should consider seeking legal advice to apply their minds correctly to reach agreement on many issues.
This includes how the family home is shared. Who pays for the mortgage after the separation will be dependent on your circumstances, and the payments can form part of the overall divorce settlement. Family Law provides guidelines for the division of property in a divorce, all based on contributions, fairness, earning power, individual needs and what is best for the children, if there are any.
Several possibilities exist here. One is the main earner continues to pay the mortgage and is later compensated by getting a larger portion of another asset. Another is that mortgage payments be split evenly, or in some other shares between the parties. Alternatively, one person can purchase the other’s share by refinancing a mortgage into their own name.
If the mortgage is in both partners’ names, they are both liable to the bank for the mortgage repayments. If payments are not made, the bank is legally entitled to repossess the property, which is not usually in the best interests of either partner. If one partner refuses to pay, it is imperative for the bank to be notified and interim arrangements be made, until the divorce is finalised.
Another option is for the property to be sold and money held in a trust until a final settlement is reached.
Who Stays & Who Leaves The Property After Separation?
Once again, this will depend entirely on the circumstances and also form part of the full settlement.
If it is not viable for both partners to live in the same house until the divorce is finalised, one spouse could take rented accommodation and funds made available.
Should neither partner want to leave the home, an application to the Court can be made to seek an order granting sole occupancy and funds be made available for the alternative accommodation.
Where children are involved the situation becomes more complicated and emotional. If finances allow, it is sometimes best for the primary carer to continue staying in the family home to lessen the trauma for the children.
Can You Arrange Property Settlement Before Your Divorce Is Finalised?
The quick answer to that is yes.
Although the law allows one to apply for a property settlement within one year (2 years after separation for de facto couples) after the divorce is finalised, it is strongly recommended to arrange it as soon as possible.
How Do You Divide Your Property When You Divorce?
If there is a Binding Financial Agreement in place, the terms should all be included in there, making the divorce and property issues a much easier and less costly affair.
Where no Financial Agreement exists, one can be negotiated and drawn up with the help of separate family lawyers, or a mediator.
If agreement cannot be reached, then settlement can only be determined by the Court.
Division of property must always be done in a just and equitable manner. Firstly, all assets and debts are valued and added together. Other assets, such as superannuation, insurance policies, and inheritances are all factored into the equation as are non-financial contributions (caring of children, homemaking, etc.) and future needs and requirements.
The contributions of each party to the relationship and earning capacities are also considered. In the case of superannuation, it must be noted that it is subject to the superannuation terms and neither spouse will access any payments, until they become entitled to them.
Both parties are required to provide full and frank disclosure of all assets, documents and information that may be relevant. If one partner discovers at a later date that the other partner failed to disclose any asset or provided false information, the order can be set aside by the Court.
Does Division Of Property Apply to De Facto Relationships?
The same laws apply for any de facto relationship, provided the couple have been living together for more than two years or a child is born out of the relationship.
In Western Australia, however, de facto partners are not able to split their superannuation, but instead, the law takes it into account by making adjustments when dividing other property between them.
Have more questions about your divorce and property division? Book a free 15 minute phone consultation with our team of divorce lawyers in Perth at Hickman Family Lawyers now.