Is there a difference between a Divorce and a Property settlement?
“They are two different legal processes with separate applications and they each have different effects and implications.”
A divorce is often confused with a property settlement. I often hear people talking about separating and going through ‘divorce proceedings’ - however they really are referring to the property settlement process.
Let’s break it down simply: A divorce is a legal process which formally ends a marriage whereas a property settlement is the process of severing the financial ties between separated people once and for all. They are two different legal processes with separate applications and they each have different effects and implications.
Divorce
You have to be separated for 12 months and 1 day to apply for a divorce.
You can be separated and still live under the same roof – there will be additional documents you need to file with your Applicaiton for Divorce if that is the case.
You can do either a joint application (if you both agree to the divorce) or a sole application (if the other party does not agree or cannot be found or you don’t want to talk to them).
A divorce is an easy process, and it is all done online through the Commonwealth Courts Portal (Comcourts). You do have to register to use Comcourts and then you do need to set up an account. The Court has some information here about how to register.
Divorce proceedings do not finalise any arrangements regarding children or finances or child support. It is just a formal recognition that the marriage has ended.
Once you are divorced, there are certain effect’s such as:
You have 12 months from the date of the Divorce Order to do a property settlement.
If you wait and try and do a property settlement outside of that 12-month period, then you will need to get the leave (consent) of the Court to proceed. This is not automatic, and the Court may refuse to give leave to proceed.
A Divorce will make an existing Will invalid.
It will not make invalid a Binding Death Nomination (BDN) on your superannuation – so it is a good time to get not only your Will but also your BDN’s reviewed and changed if need be.
A Divorce will mean you are no longer classified as a spouse, which will mean you won’t have standing to make a family provision application (i.e. contest a Will) and if no Will you will not be part of the intestacy rules for distribution.
You can remarry!
Property settlement
You can do a property settlement at any time – infact, you don’t have to even be separated to do a property settlement (true story! I’ll do a blog on that point another day).
In fact, we encourage people to deal with their financial ties after a separation as quickly as possible.
A property settlement is the process of severing the financial ties between separated people once and for all. When done correctly and formally, it is binding and enforceable and draws a line in the same so that you can build (or rebuild) your wealth without fear that your former spouse will come back for another bite of the proverbial cherry.
And if you are Divorced, it will not affect your rights to a property settlement (provided you undertake the property settlement within the first 12 months after a divorce – and if it is outside that time, then get some legal advice as you may be able to obtain leave to apply outside of time).
A property settlement will take into account all assets, liabilities and superannuation owned by you both (both jointly, individually and even if you have an interest with a third party). It also does not matter when the item of property was obtained – i.e. before the relationship, during or after. It is all included and then there is an assessment of how you each have contributed to the items of property. There are other factors that are looked at in the process, which will be the subject of another blog or hop on over to this page of our website for more information on the property settlement process.
Check out our FAQ page for more specific answers to some questions you may have about Divorces and Property Settlements or, book in and let’s have a chat!
Where to from here?
You are probably in one of three head spaces right now:
You liked the information, you found it interesting - but that’s all you wanted for now.
This blog post resonated with you but you are just not ready yet to do anything and just want to look at more information – I suggest you look at the other free information we have on our website.
You are wanting more information about what you need to know after separation or you are ready to do something about your problem right now. If that is the case, then book an appointment with us by clicking here to make an online booking!
