Most people know someone who has been affected by a relationship breakdown. It can be a very stressful and emotional time where people are anxious about divorce, a financial settlement and the emotional wellbeing and care arrangements for children.
In this article we have identified the top 5 issues where myths exist.
Myth 1: You need to be divorced before you can divide your property.
A divorce does not need to be finalised before a financial settlement can be negotiated. Once you become separated you can immediately start negotiating a financial settlement.
In order to apply for a Divorce Order, you need to have been separated for 12 months. A Divorce Order brings about the legal end to a marriage.
Importantly, it should be noted that there is a time limit of 12 months from the date of your Divorce Order to start Court proceedings for a financial settlement.
Myth 2: I owned it before we got together, so it’s mine if we separate.
A person will not necessarily be able to keep things in their own name that they brought into the relationship, or that were paid for individually during the course of the relationship.
The factors which must be taken into account when the Federal Circuit & Family Court of Australia (“the Court”) considers how property is to be divided is set out in the Family Law Act 1975. A financial settlement should take into account the various contributions made by both parties to the accumulation of the assets as well as the future needs of both parties.
A Family Lawyer can advise exactly what will be taken into consideration by the Court when providing detailed and specific advice to clients about their individual circumstances.
Myth 3: Property will always be split 50/50 in a financial settlement.
This is a very common myth in Family Law. There is no rule or presumption that parties have to divide their assets equally when they separate.
The outcome depends on a thorough consideration of the contributions and future needs of both parties and whether parties reach an agreement between themselves or whether a Court is compelled to make a final decision.
Myth 4: The assets are held by a company or trust, so they are excluded from a financial settlement.
When a marriage or de facto relationship breaks down, parties are entitled to a fair division of the net assets in which they have an interest.
In the case of assets owned by a company or trust, the Court will look at who has control over the company or trust. If the entity is under the control of one of the parties (regardless of whether a party is a director or not), the Court has the power to deal with the assets as an asset of the marriage or de facto relationship.
Myth 5: Pre-nuptial agreements are only used in the USA.
The use of Pre-Nuptial agreements or “pre-nups”, as they are often known, has been popularised by their use in the USA.
We have ‘pre-nups’ in Australia however, they are known by the name Financial Agreements or Binding Financial Agreements (‘BFA’).
Parties can enter into a BFA before or during a relationship, or after a relationship breakdown or divorce.
BFA’s must be properly drafted and executed to ensure the agreed financial distribution is enforceable. It is important to discuss the content of a BFA with your lawyer to ensure your assets are protected.
Conclusion
No two Family Law cases are the same. The Court will always take into account the individual circumstances of each matter before applying its discretion when making decisions.
If you, or someone you know wants more information or needs assistance or advice, please contact us for detailed legal advice on 03 9857 0099 or email melbourne@maeveobrien.com.au.