Often, we have clients who separated amicably, but have not taken the necessary steps to formalise their property settlement. We often hear that the reason for the delay is:
- the house has no mortgage
- the person living in the property is meeting the mortgage and outgoings
- one party has re-partnered
- neither party wants the family home to be sold
- they have arranged their own settlement and remain amicable, and do not see the need to formalise a property settlement.
By delaying your property settlement, you leave yourself and your assets at risk. You will continue to be financially linked to your ex-partner following separation, until you undertake a property settlement.
Delaying your property settlement creates many risks but the most significant risk is that the value of the assets of your relationship continue to increase until the date you finalise your property settlement. This means that any real estate, superannuation, self-managed superfunds, shares and other assets can increase (or decrease) in value over the years, which will impact your entitlement. If you separate in 2020 but do not take steps to formalise your property settlement until 2024, it is the value of the property as at 2024 not 2020 that the Family Court looks at.
Re-partnering is a risk if you have not formalised your property settlement. If you jointly own assets with your first partner or intermingle assets from your previous relationship with your current relationship, you risk unnecessarily involving your new partner (and their assets).
Another complicated situation that we have seen arise is where one party passes away prior to a property settlement being formalised. Once a party has passed away, the other party cannot commence property settlement proceedings in the Family Court and the assets of the relationship will be dealt with in accordance with the deceased’s Will instead. In this situation, if a property was held as joint tenants, there is a risk that the deceased’s share in the property will automatically be received by the other party. If your ex-partner passes away after the commencement of Court proceedings though, these proceedings can continue through the Court system with the legal beneficiary of the deceased acting on behalf of the deceased.
It is important to draw a line in the sand after you separate, formalise your property settlement and protect your assets for the future. It is recommended that you seek advice early following your separation and give your solicitor all the information they need to ensure your rights and entitlements are protected. Caldwell Martin Cox has five lawyers who specialise in family law and would love to be able to assist you in resolving your property settlement and protecting your assets for your future and your children’s future.