When it comes to divorce and transfer of property, there are a lot of factors to consider before making important decisions.
As family lawyers in Perth who regularly assist clients with property matters on separation or divorce, we’ve put together a short guide on what you should know with regards to divorce and transfer of property.
A Guide To Divorce And Transfer Of Property
What counts as property?
Firstly, you need to understand what counts as property in a divorce.
All assets and liabilities, regardless in whose names they are registered, can count as property in a divorce or separation.
This includes the family home and all other properties, cash on hand, bank accounts, investments, insurance policies, vehicles, business interests, household furniture, equipment and other valuables, superannuation and debt, including credit card and outstanding taxes.
Do you have to be divorced before settling property matters?
No, you do not. You can start the process as soon as you have separated.
It is highly advisable to reach a settlement as soon as possible, because the value of assets is taken at the time of the application. If you leave that to a later date, any asset accumulated by either party after the separation or divorce will automatically be included into the asset pool to be divided when the application is made.
If you’re planning to purchase any property or other valuable asset before your settlement is finalised, professional legal advice is strongly recommended.
Do you have to go to Court for property matters?
No, you do not have to go to Family Court for decisions to be made on property matters.
if you and your ex can reach agreement on how to divide your property on your own or through mediation, there is no need to go to Court.
You do, however, need to formalise your agreement if you want to make it legally binding and prevent either party from making any further claims from each other in future.
Property settlements are often complex and highly emotive matters and regardless of how amicable your divorce or separation may seem, it is highly advisable for both parties to obtain legal advice as early as possible to know what their legal rights and obligations are.
What happens if we can agree on property matters?
Once you and your ex have agreed on all of your property maters, you need to apply to the Family Court for a consent order.
If you have reached a settlement agreement through mediation, the mediator can assist you in drawing up the agreement, which you can take to your own family lawyer for a second opinion if you wish before signing it and submitting it to the Family Court.
The Family Court will consider several criteria before granting the order. Factors can include the financial and non-financial contributions made by each party, the length of the marriage, future needs of the family, earning capacities of both parties, and the most important one of all, whether the agreement is fair and equitable. If the Court is satisfied that it meets all the requirements, it will approve it, upon which it becomes legally binding and enforceable on both parties.
What happens if we can’t agree on property matters?
Sometimes it is not always possible for divorcing or separating couples to agree on all their property matters, leaving them with no choice but to take their case to the Court, where a Magistrate or Judge will make the final decision.
Although only the unresolved matters will be settled by Court, this process may still turn out to be long, stressful and expensive. Separating couples are therefore urged to seek ways of reaching a settlement on their own eliminating unnecessary costs and stress to their families.
Is there a time limit to settle property matters after divorce?
Yes, there are time limits to settle property matters after divorce.
If you were married, you have 12 months from the date your divorce was approved by the Family Court in which to file your application.
If you were in a de facto relationship, you must apply to the Family Court within 24 months from the date of your separation.
In certain situations, it is still possible to apply after these periods, but the process is complex, requiring professional legal advice and applications are not always granted.
What do we do with the family home if it was bought in joint names?
The family home is often the most valuable and contentious asset for many families going through a divorce. Apart from the monetary value there are also emotions attached for both parties, making it a difficult asset to decide on how it should be split.
As each divorce comes with its own set of circumstances and challenges, there are no hard and fast rules that apply to everyone. There are however three basic ways of dealing with the family home, even if it was bought jointly.
1 – Sell the property and divide the proceeds. This is probably the easiest and cleanest way. After all selling and mortgage costs are paid up, the profits are split between the two parties in whatever percentage is agreed.
2 – Transfer the property to one person. The couple decide who gets to keep the house and pays the other’s share as part of the overall divorce property settlement. When transfer of the property from one spouse to another is made with a court order, you can apply for a transfer duty exemption and could only pay a nominal transfer duty.
3 – Keep the house in joint names. If it’s not financially viable to sell the family home at that particular point in time, it can remain jointly owned until such time as a permanent solution can be found. In that case, couples have several options.
- Both parties continue living in the same house, sharing mortgage and living costs.
- One party stays and continues paying the mortgage until it becomes financially viable to sell the property and split the profits.
One must always remember that if the mortgage is registered in both your names, you are both responsible for the monthly payments, no matter who lives in the property. If payments fall behind, the bank will be entitled to repossess the house which is to the detriment to both parties. The bank must be notified of whatever interim arrangements you have made.
We hope this short guide to divorce and transfer of property has helped you – if you would like to consult with one of our family lawyers in Perth for more personalised guidance on your specific circumstances, get in touch with us today.
