How To Negotiate Property Settlement

Upon a breakdown of a relationship, the parties need to consider what should happen in relation to the division of any property owned by a former partner, both separately or jointly.

This is referred to as a matrimonial property settlement under the Family Law Act. A matrimonial property settlement under the Family Law Partner Act extends to spouses who are or have been, married and also a former partner, or former spouse who has been in a de facto relationship. De facto relationships also include a relationship between two people of the same sex. This blog will explain the property settlement process as well as guidance on how to negotiate a property settlement.

Attempt an agreement first

The Courts require parties to make a genuine effort to reach a matrimonial property settlement by way of agreement before commencing any court process.

The advantages of reaching an agreement rather than issuing court proceedings are:

• Reduced legal cost-benefit analysis from an experienced  family lawyer or respective lawyers;
• Reduced stress of the litigation process;
• Allows the parties to be part of a fair deal decision-making process regarding property division, asset pool, divorce settlement, undisclosed asset, and other full financial disclosure, rather than the Courts imposing the decision on them;
• Certainty of the outcome of the property settlement, and other property matters;
• Reaching finalisation of succession planning matter in a more scheme approved timely manner, as court proceedings may take several months, if not years to conclude;
• Reduces animosity between the parties, particularly where children are involved.

The property settlement process itself can often be difficult, regardless of the circumstances of the relationship or separation. Without adequate preparation, the process can be particularly lengthy, costly and stressful. The greatest error other party can make is to enter the negotiation process without the proper support, seek advice, or legal guidance and understanding of their legal rights.

Seek the right legal advice from a family lawyer

The most secure way to get property negotiations carried out in the most efficient and amicable manner is to obtain professional advice. It is important that parties do not overlook the importance of seeking professional legal and financial advice on any legal matter, particularly where property and assets are involved. There are strict time limits that apply in property settlements as well as various obligations that parties are required to comply with. One party could face detrimental outcomes if they fail in compliance with these obligations and/or time limits.

Disclose everything relevant to the matter

After you have sought legal advice, the next step of the property settlement process is for the parties to be able to identify the assets of the matrimonial property pool. This is achieved by way of financial disclosure.

It is vital that the parties are as transparent in their financial circumstance as possible, as attempting to conceal assets or financial positions will most likely lead to extended litigation in obtaining the disclosure through family court orders.

Rule 13.01 of the Family Law Rules imposes a duty on both parties to disclose all relevant information and states that ‘each party to a case has the duty to provide full and frank disclosure of all information relevant to the proceedings in a timely manner.

The duty to provide all full and frank disclosure means that each party must provide to the other all information relevant to property settlement. This includes things such as income, assets held solely or jointly, bank statements, tax returns and other financial resources as interests in a family trust or a deceased estate yet to be distributed. The list is not exhaustive and depends on the circumstances of each case.

Identify the asset pool

Asset pool and liabilities of the relationship, whether held solely or jointly, fall into what is referred to as the property pool.

Once financial disclosure has been completed, the parties can then determine all assets and liabilities that should be included and determine the total net value of the property pool. In order to accurately evaluate certain assets, the parties may need to also engage valuers, accountants or other financial professionals to assist in providing valuations of those assets.

Dividing the property pool

Once agreement is reached on the assets and liabilities to be included in the property pool and the net value of that pool, negotiations can commence on how the property pool is to be divided.