The short answer is that not every property settlement requires a lawyer to negotiate every aspect of the agreement. However, obtaining legal advice before finalising a property settlement can be important, even where you and your former partner are on good terms and have already agreed about how your property should be divided.

A property settlement can affect your home, savings, superannuation, debts, businesses and future financial position. Once final property orders are made, there are only limited circumstances in which they can later be changed.

Understanding the legal effect of an agreement before it becomes final can therefore be just as important as reaching the agreement itself.

Can you agree on a property settlement without a lawyer?

Yes.

Separating couples can negotiate directly with each other and may be able to reach agreement without lawyers conducting the negotiations.

The Federal Circuit and Family Court of Australia encourages separating couples, where it is safe and appropriate to do so, to try to reach their own agreement about property and financial matters.

An agreement might deal with matters such as:

• who retains the family home;
• whether property will be sold;
• how sale proceeds will be divided;
• bank accounts and savings;
• motor vehicles;
• investments;
• debts and mortgages;
• businesses or companies; and
• superannuation.

However, reaching an agreement and properly formalising that agreement are two different things.

That distinction is important.

Why isn't a verbal or informal agreement necessarily enough?

You and your former partner might agree that one person will keep the house while the other receives savings or other property.

But an informal agreement may not provide the same certainty and enforceability as formally documenting the property settlement.

The Court recommends formally documenting an agreed property division to ensure both parties understand what has been agreed and to help avoid future disputes or misunderstandings.

There are generally two ways of formally documenting an agreed property settlement under the Family Law Act 1975:

• Consent Orders; or
• a Binding Financial Agreement.

What does a lawyer actually do in a property settlement?

The role of a family lawyer depends on how much assistance you require.

If you and your former partner have already reached agreement, you may primarily require advice about whether the proposed settlement appropriately addresses the relevant issues and assistance documenting it.

In a disputed matter, considerably more work may be required.

A family lawyer may assist with:

• identifying the property and liabilities;
• obtaining and reviewing financial disclosure;
• advising about the legal principles relevant to the proposed division;
• identifying assets or liabilities that may have been overlooked;
• negotiating with your former partner or their solicitor;
• arranging valuations where required;
• considering businesses, companies and trusts;
• dealing with superannuation;
• advising about proposed Consent Orders or a Financial Agreement;
• drafting documents required to formalise the settlement; and
• commencing or responding to Court proceedings where agreement cannot be reached.

How do you know whether a proposed property division is reasonable?

A common difficulty for people negotiating their own property settlement is knowing whether the proposed division appropriately reflects their circumstances.

There is no automatic 50/50 rule.

Under the current Family Law Act 1975, when determining a property settlement the Court identifies the parties' existing property interests and liabilities and considers the matters specified by the legislation, including relevant contributions and current and future circumstances. The Court must ultimately be satisfied that making the property order is just and equitable.

Relevant circumstances can differ significantly from one relationship to another.

For a detailed explanation, read How Is a Property Settlement Calculated After Separation in Australia?

What if you don't know everything your former partner owns?

This is one situation where obtaining advice can be particularly important.

Parties to family law financial matters have obligations concerning financial disclosure.

The financial circumstances requiring consideration can extend beyond the family home and bank accounts and may involve:

• companies;
• trusts;
• business interests;
• investments;
• shares;
• superannuation;
• loans;
• cryptocurrency;
• property held through other structures; and
• financial resources.

Even an Application for Consent Orders requires each party to provide full disclosure of their respective financial circumstances.

Read more about the Duty of Financial Disclosure in Family Law Property Settlements.

What if a business, company or trust is involved?

Property settlements involving businesses and corporate or trust structures can require additional consideration.

For example, it may be necessary to determine:

• who legally owns particular assets;
• the value of a business;
• interests held through a company or trust;
• shareholder or beneficiary loan accounts;
• related-party liabilities;
• taxation consequences; and
• how any proposed transfer can practically be implemented.

A business shown in financial statements at a particular value may not necessarily have that market value.

Independent valuation evidence may therefore be required in some matters.

For more information, read Complex Property Settlements: Businesses, Companies and Trusts.

What if superannuation needs to be divided?

Superannuation can form an important part of a property settlement.

The Family Law Act allows property orders to include orders concerning superannuation interests, subject to the specific requirements governing superannuation splitting.

Where a superannuation split is proposed, additional procedural requirements can apply.

This is an area where carefully drafted documents are particularly important.

Do you need separate lawyers?

If the property settlement is being documented by a Binding Financial Agreement, each party must receive the prescribed independent legal advice from an Australian legal practitioner.

Consent Orders are different.

You are not legally required to have a lawyer or obtain legal advice before entering into Consent Orders.

However, the Court expressly recommends obtaining legal advice so that you understand your rights, responsibilities and the effect of the proposed orders.

This distinction can be important when deciding how an agreed property settlement should be documented.

Do you need to go to Court for a property settlement?

Not necessarily.

Many property settlements are resolved without a contested Court hearing.

If agreement is reached, parties can apply for Consent Orders, which can generally be considered by the Court without the parties appearing in Court.

If the parties cannot reach agreement after genuine attempts to resolve the dispute, one party may ultimately apply to the Court for property orders. The Court has pre-action procedures that generally require parties to take genuine steps to resolve a financial dispute before commencing proceedings, subject to exceptions.

When should you consider getting legal advice?

It can be particularly important to obtain advice where:

• there is a significant difference in the parties' proposed settlement;
• you are unsure what you may be entitled to;
• financial disclosure is incomplete;
• one person controlled the finances during the relationship;
• a business, company or trust is involved;
• there are substantial assets or debts;
• there is disagreement about asset values;
• one party received a significant inheritance;
• there are overseas assets;
• superannuation is to be divided;
• one person wants to retain the family home;
• there are taxation issues;
• there are concerns about assets being sold or transferred;
• family violence or financial abuse is relevant; or
• proceedings have already commenced.

Even where none of these issues arises, obtaining advice before signing final documents can help you understand the legal consequences of the proposed settlement.

Is it cheaper to reach an agreement without going to Court?

Generally, resolving a property matter by agreement can avoid much of the time and expense associated with contested litigation.

The Court itself notes that Consent Orders can help separating couples resolve their financial relationship while avoiding the time and expense of litigation.

That does not necessarily mean avoiding lawyers altogether.

In many matters, legal advice can instead be used strategically: to understand your position, assist with negotiations where necessary and properly document the settlement once agreement has been reached.

Are there time limits for property settlements?

Yes.

For married couples, an application for property orders should generally be made within 12 months after a divorce becomes final.

For former de facto couples, the general period is two years after the breakdown of the de facto relationship.

Importantly, married couples do not have to wait until they are divorced before dealing with their property settlement.

If the relevant period has already expired, legal advice should be obtained about whether an application can still be made.

Property settlement lawyers on the Gold Coast

You do not necessarily need a lawyer to conduct every stage of a property settlement.

However, obtaining advice can help you understand your legal position, identify issues that may not have been considered and ensure that an agreement is appropriately documented.

This article provides general information only and is not legal advice. The appropriate approach to a property settlement depends upon the circumstances of each matter.