September 2, 2019
Have You Run Out Of Time To Split Your Assets?
Time Limits When You Were Married.
Most people are not aware that there are time limits to make an application for a property settlement.
You can't just get divorced and then five years later decide you need to split your assets.
This is probably a really important time to highlight the difference between a divorce and a property settlement.
A divorce simply ends your marriage. It does NOT divide your assets.
You can get divorced without doing a property settlement and you can do a property settlement without doing a divorce. They are two separate things.
It would not be fair if you were able to get a divorce (that is just to end the marriage) and then come back many years later for a property settlement.
It would be unfair as in that time either you or your former spouse may have acquired or lost assets and built property up as separate individuals, not as a couple.
Especially, because in Family Law, your assets keep building together until the date of settlement.
You don't divide your assets at the date of separation, it is the date of settlement.
This is why the Court has set time limits around getting a property settlement. These time limits are different depending on whether you are married or a de facto couple.
In this article, we are just going to go over the time limits for couples who are married. We are also going to discuss what to do if you're already out of time.
Stage 1: Time Limits For Married Couples
If you have separated but are still married, and never divorced, that is you never formally ended the marriage, you can apply for a property settlement at any time.
There are no time limits that apply to you at this stage.
However, it is always a good idea to do it as soon as possible, because as mentioned earlier, your assets keep building together.
For example, you might build up a successful business years after separation, or you might win the lotto. You don't want your former spouse many years later to be able to make a claim on those assets.
But there are no time limits if you're still married.
On the other hand, if you were married, separated, and then formally divorced, you have one year from the date the divorce took effect to apply for a property settlement.
This means you have to apply to the Family Court or the Federal Circuit Court before the 12 month expiry.
It does not mean you need to reach an agreement within the 12 months and it does not mean the Court has to hear it within the 12 months. You simply have to make the application by then.
If you are unsure on when you exactly got divorced, you can contact us on 1300 767 384 and we can help you obtain a copy of your divorce certificate.
But what if you and your former spouse agree on how you're going to split the property pool and you just want to formalise your property settlement?
If you and your former spouse agree on how you want to divide your assets and just want to formalise this agreement, you can still do so even if the one year has expired.
Where you run into trouble is when you don't agree on how the assets should be divided and it's already been more than one year since your divorce.
Do not let your former spouse drag things out.
We have come across matters where one spouse drags the negotiations out over time after the divorce.
They appear on all accounts to want to settle things amicably. They suggest they're happy splitting the assets how the other person has proposed, but they delay on actually formalising the agreement.
Then, once the 12 months has expired and no agreement is formalised, they don't agree with the original agreement.
You would then technically be out of time to make an application for a property settlement. Meaning you could potentially miss out on something that you're entitled to.
Because you no longer agree on the property settlement, and now the time limit has passed, it makes it extremely hard and sometimes not even possible to apply for a property settlement.
If you sense that your former spouse is trying to drag things out past the time limit, then we strongly suggest you make an application to the Court to protect your interests.
If you are still unsure on whether or not you are out of time, you can use our out of time calculator below.
Stage 2: What To Do When You're Out Of Time
If you find yourself in a situation where your time limit has already expired, then you may still be entitled to make an application for a property settlement.
In order to do this the Court must grant you leave. Leave is just like permission to proceed with your application.
The Court will only grant permission if:
Once hardship is established, the Court will also look at other factors like:
In 1994 there was a couple that separated.
Shortly after that the wife's lawyers wrote to the husband and proposed that the wife keep her car and some other personal items. In exchange for that, the wife would transfer her interest in the property to the husband, which at the time had around $15,000 equity in it.
The parties divorced the following year.
No property settlement was ever formalised and the property remained in joint names.
Fast forward years down the track. In 2013 the wife got legal advice and she said it was the first time she was advised about the time limit. By that stage, the equity in the house, which back then was only $15,000, had increased to $300,000.
The wife filed an application to commence a property settlement out of time.
So what did the Court do?
At first instance, the Court said the wife had established hardship, but there was no reasonable explanation for the delay when there was a notation on the bottom of the divorce order about the time limit.
As well as the fact she had previously consulted lawyers.
The judge also said it would prejudice the husband to allow proceedings so far out of time.
Therefore, the only option available to the wife would be to apply to the State Courts to seek some remedy instead of under the Family Law Act.
Now, the wife obviously wasn't happy with this decision, so she appealed it.
On appeal, the Court said there was some explanation for the delay by the wife, but the husband had been equally inactive in formalising matters.
The Court said that the wife did have the option of applying to the State Courts, but this did not reduce her hardship because the State Courts don't take into consideration the wife's contributions to children and other relevant matters.
On appeal, the wife was allowed to proceed out of time.
If you do find yourself in a position where you've run out of time, then it's important that you act quickly.
Where necessary, you should get legal advice on your particular situation, and depending on that recommendation, submit an application for a property settlement as soon as possible.
If you need to apply for a property settlement but don't know how, watch our video, how to apply for a property settlement, which is linked below.
If you want some advice on your particular situation, feel free to give us a call on 1300 767 384, or you can email us at [email protected]. One of our qualified lawyers will be able to let you know what to do to ensure you have the best chance of getting a property settlement if you're out of time.
August 27, 2019