Divorce or any legal separation between you and your partner is more than just parting ways. It also involves the process of calculating a fair distribution of assets and determining the responsibilities required for the children.
Property settlement is a part of the distribution of assets in a separation or divorce.
What is a property settlement?
As the name implies, property settlement is the decision around how to divide the assets and allocate the debts between you and your partner.
Property settlement can be an especially exhausting issue involving many factors. However, you can reduce or prevent conflict by following these tips:
Identify all the property you can divide
When we refer to “property”, it’s not limited to real estate. In fact, property settlement involves all assets owned by both parties (or in which they have an interest) including bank accounts, motor vehicles, boats, aircraft, shares, superannuation, pensions, contents, chattels, collectables, loans that are owed, life insurance policies, brokerage accounts and any other items that may be considered of value.
To guarantee that you’ll receive fair value when you divide any property, you may need to seek the help of a registered valuer.
Settle all issues involving dual signatures on your bank accounts
You wouldn’t want your partner to withdraw large sums of money from your joint bank account without your knowledge, particularly if this person may hide funds for their sole benefit. So, take the initiative to contact your bank or financial institution to ensure all access to your joint accounts will require both signatures – both you and your partner.
Conversely, if you are being supported financially by your partner and you do not have an income stream or other cash available to you, you may wish to consider withdrawing money from the joint bank accounts before your partner potentially arranges dual signatures to be placed on them.
Take note that you will still be accountable for this money. Withdrawing it earlier will just help you meet your immediate living costs in the event of separation. If you’re in this kind of situation, it’s best to seek help from a lawyer to find out if you could obtain spousal maintenance from your partner (which is money paid to you to meet your usual and everyday living expenses).
Arrange necessary credit limits
To prevent your partner from using money without your consent, talk to your financial institutions to cancel redraw facilities from your loan accounts. You may also wish to cancel your partner’s secondary cardholder access to credit card accounts that are in your sole name or reduce the credit card limit.
On the other hand, as with joint bank accounts, if you are being supported by your partner with no other income or cash available to you, you may consider redrawing money available from loan accounts to meet your everyday living costs before your partner cancels the redraw facility or reduces credit limits.
However, just like above, you are still accountable for this money. Withdrawing it earlier will just help you meet your immediate living costs in the event of separation.
Copy financial documents and records
Save your own copies of important files, so you’ll get a reliable perspective of your property settlement entitlements.
Some documents and reports that are important when preparing for a property settlement include:
- bank statements
- credit card statements
- loan documents
- superannuation statements
- tax returns and notices of assessments
- employment contracts
- contracts and settlement statements for the purchase and sale of assets
- any documents referring to the value of assets or debts held by each of you at the commencement of your relationship
- documents relating to any inheritances, payouts or gifts received by either of you during the relationship
- other financial records you may be able to locate relating to assets, liabilities, income or financial contributions made by either you or your partner
Nevertheless, if you are unable to obtain this information, you can get legal help for other possible methods of disclosure. Your lawyer can assist you by conducting searches through various online systems or issuing subpoenas.
Secure valuables, cash and sentimental items
If you are concerned about your partner removing cash, valuables or sentimental items from your marital home without your permission, you should ensure these things are placed somewhere safe. It’s also essential to secure those items you know may be sought after by both parties, so you can be certain of their whereabouts in the future.
Change the locks
Once you’ve officially separated, you can now decide to prohibit your partner from entering your property without your knowledge. For your own peace and safety, you can even change the locks.
However, this depends if it’s a joint property or not. If you’re not sure, seek legal advice as they’re technically entitled to enter if they’re a co-owner.
Handle caveats, injunctions (restraining orders) and undertakings wisely
Whether assets are in joint names, either parties’ sole name (or your partner’s name with someone else) or the name of an entity operated or controlled by your partner, property settlement arrangements take into account all assets, regardless of who is the named owner.
So, in instances where you made indirect, financial or non-financial contributions towards an asset, know that you have an equitable interest in it even though you may not be a registered owner. This means you may be able to register a caveat against real property (real estate – land, houses, units) to ensure your partner will not be able to sell, transfer, encumber or otherwise deal with the property contrary to your interests.
Similarly, you may wish to consider obtaining an injunction or restraining order and/or suitable undertaking to prevent your partner from disposing or dealing with marital assets that you have an interest in (regardless of whether these assets are in your name).
For any property settlement agreement, always remember to seek formal legal advice before taking this type of action. You wouldn’t want to be liable for damages just because your actions lack reasonable grounds.
Update your Will and Enduring Power of Attorney
If you don’t get your Will and Enduring Power of Attorney updated, your assets may pass to your partner or spouse upon your death or they may still be able to act as your attorney – regardless of your separation.
Because of this, even before your divorce is formally granted, it’s best to ask advice from a lawyer who handles Wills and Estate matters. This will ensure your Will and Enduring Power of Attorney is up to date and legally binding.
If in doubt, always seek legal advice about property settlement.