Property settlement after separation in Victoria
14 January 2025
A predominant concern that arises when planning a separation or divorce is what happens to the property. It may be the case that both partners contributed relatively equally to the finances during the relationship, resulting in a straightforward property settlement. In other cases, matters may be far more complex.
On the surface, it can be difficult to know how property should be distributed after a separation or divorce, however the ultimate aim is that neither party receives an unfair deal. Speaking with lawyers about property settlement after separation in Victoria can help to clarify what each individual’s position is, and what each party is legally entitled to.
In this article, we’ll look at what property settlement is, what is legally deemed ‘property’, and look at timelines for property settlement. We’ll also cover what individuals can do to ensure the property settlement process runs as quickly and smoothly as possible.
What is property settlement?
Property settlement is a process whereby the assets and liabilities of a couple are divided up when they separate. The aim is to reach a fair distribution that considers each partner's circumstances and future needs. If agreement can’t be reached, legal assistance or court intervention may be necessary.
A property settlement takes into account both financial and non-financial contributions. We will explain these in more detail later on.
Do property settlement laws differ across states and territories?
The Family Law Act 1975 (Cth) governs property settlements after separation for married and de facto couples in Victoria, and in most other states and territories. There may be minor legal and procedural differences in different locations, and some states and territories may have unique considerations for certain types of property, such as farming assets or Indigenous land.
Western Australia has its own laws governing property settlements for de facto couples under the Family Court Act 1997 (WA), separate from the Family Law Act.
What constitutes ‘property’ in a property settlement?
When it comes to property settlement in Victoria, it may be unclear to those going through a separation what constitutes ‘property’. To clarify, property includes both assets owned and debts owed by both people in the relationship, regardless of whose name those assets and debts are in.
The assets and debts considered property in a property settlement include:
Bank accounts
The family home
Investments
Cash
Businesses
Shares
Superannuation
Insurance policies
Family trusts
Inheritances
Debts (loans, mortgages, credit cards and personal debts)
Vehicles
Jewellery
Gifts exchanged between married/de facto partners.
Note that this list is not exhaustive, and if your property settlement proceeds to the family law courts, they will assess additional factors including:
Non-financial contributions to the relationship, such as caring for children and doing housework
Other contributions to property that are non-financial, such as running a family business, renovating a home or managing investments
Future financial needs for each party (caring responsibilities, age, health, financial resources and capacity to earn are factored in).
Do I have a right to property in a settlement with my ex?
You may do. Even if you earn very little money, or you are not earning at all, you may still have rights to property in a separation. That’s why it’s important to seek independent legal advice to know where you stand.
What can I expect to receive from a property settlement?
This will always vary based on your particular circumstances, and the assets and liabilities within the relationship. It will also depend on whether or not you had a Financial Agreement in place with your ex spouse or de facto, as this would give you clarity on how finances are to be distributed in the event of separation. If matters instead proceed to the Family Court, the Court will decide on matters, taking into account the factors mentioned above.
Note, there is no strict formula for dividing up property, and each situation is different. If you are wanting more clarity on what the property settlement after separation will be in your case, speaking with an experienced family lawyer can help, as they will have a better idea of the factors the Family Court will consider in your case.
Is there a waiting period before I can apply for property settlement?
No. Property settlement matters may commence as soon as you and your partner decide to separate.
How long does it take to settle property?
Ideally, you should settle property as soon as possible after you separate from your partner (you don’t need to wait until a divorce finalisation to settle your property). Indeed, if you have children in the relationship, it is often best to sort out property settlement quickly, so that you can both progress forward with an accurate idea of your financial standing, and support children appropriately.
Time limits
Time limits do apply when it comes to applying to the Family Court for financial orders. These differ slightly according to whether or not you were married or were in a de facto partnership.
Married couples: You need to apply for property orders within 12 months of the date your divorce was finalised. (If your marriage has been declared nullity (annulment), financial applications also must be made within 12 months of the date decree of nullity was declared.)
De facto couples: You must apply for property orders within two years of the breakdown of your relationship.
If property matters aren’t resolved within these time frames, you must seek permission from the Court to apply for property orders.
(Property orders (financial orders) are orders made by the Court that relate to the division of property or money. Property orders may be made by the Court, based on an agreement between you and your ex partner, or after a Court hearing or trial. Note that requests for property orders aren’t always granted, which is why it’s important to formalise property settlements sooner rather than later.)
What do I need to do to get property settlement underway?
There are a number of things you and your ex-partner can do to assist with a smooth property settlement. If you can do these things, there is likely to be fewer delays to the settlement process. These things are:
Seek independent legal advice about your situation. A lawyer will be able to advise you of the most appropriate path for you to take to settle property, given your individual situation. (See more in the next section about different approaches to property settlement.)
Get your financial records in order. Ensure you have access to financial information likely to be relevant to your property settlement. This includes information about share portfolios, superannuation, insurance policies, and bank accounts.
Be transparent with your partner about the property you own and any debts in your name. If asked, provide your partner/spouse or their lawyer with requested documents, or a reasonable explanation as to why you can’t. Not being able to supply required documentation can really hold up the property settlement process.
Maintain money in a joint account until property arrangements are finalised. I.e., don’t transfer money out of a mutual account into one your spouse/partner cannot access, as this may destabilise your partner’s financial security temporarily, and lead to ill feeling.
Don’t attempt to hide property assets or debts. In a property settlement, you will be obliged to provide lawyers with a record of your bank account history. They are adept at analysing bank accounts and looking for new bank accounts you’ve transferred money to, or for significant transfers. Basically, you won’t be able to hide it if you move your money around, so it’s best not to try.
Don’t spend money frivolously in an effort to stop your partner having access to those funds.
Do I need to go to court to settle property?
Going to Court is time-consuming and costly, which is why it’s preferable to avoid it. The Court may also make decisions that don’t provide you with the outcome you hope for. This is why it is better to explore other avenues to resolve a property settlement first.
Add to that, the Family Court required you and your ex-partner to have made genuine efforts to resolve matters before you file your application. That’s where legal assistance and mediation comes into it.
Alternatives to going to Court are:
Making an informal agreement: You can work with a lawyer to make an informal agreement with your spouse as to how property should be divided. A lawyer will help you to identify all factors that should be considered in the settlement, however an informal agreement is not enforceable by a court, so you may need to go to court if you or your partner asks for another property settlement down the track.
Make a financial agreement: Financial agreements state how your property is to be divided in the event of a separation. They can be made at any time in your relationship, whether it be before you started living together, whilst living together, or after separation. Both parties must seek independent legal advice before signing a financial agreement, and lawyers will need to be informed about all property assets and liabilities, as well as other factors. There are a range of reasons why a financial agreement may be rejected by a court, and include if the agreement was made under duress or coercion, and if either party was not transparent about assets and liabilities when the agreement was made. Also, if circumstances have changed since the agreement was made, such as one of the parties having suffered a health issue, has lost employment, or children are now part of the relationship.
Consent orders: A consent order is a written agreement both separating parties consent to, outlining how property will be divided between them. The application for consent orders is sent to the Family Court in order to make the agreement legally binding. Before the Court approves an agreement, it will assess the situation to determine if the agreement is fair. Whilst parties don’t attend court as part of a consent order, the consent order has the same effect as a court order made after a hearing.
Approaches to Property Settlement after Separation in Victoria
In an attempt to resolve property disputes after a separation and come to agreement between separating parties, a lawyer may recommend one of the following approaches:
Mediation: This involves both members of the couple sitting with a neutral third party (the mediator). The mediator will try as far as possible to help couples resolve issues in an amicable manner. They’ll facilitate discussions on asset division, financial arrangements and parenting plans with the aim of coming to a fair agreement for both parties.
Mediators don’t provide legal advice, but instead, provide legal context to discussions. They also draft agreements for court approval. Using a mediator tends to be far less expensive than proceeding with litigation. It is also, importantly, more private, and what is discussed can stay between those in the room. Finally, it is faster and less stressful than litigation.
Collaborative law: This involves separating parties and their lawyers having a four-way meeting that includes a contract being signed to assure both parties that the other will not litigate.
Direct negotiations: This is where lawyers attempt to negotiate and resolve matters via correspondence.
Direct discussions: This is where separating parties and their lawyers have a direct discussion via a conference.
Litigation: This is where matters are resolved via a court process.
In some cases, more than one of the above approaches will be applicable to a property settlement after separation.
At Aitken Partners, we sensibly assess each case, and tailor our approach to the particular needs of those separating and their family. For more information and support with property settlement, binding financial agreements and child support, contact us today.