Can you divorce without a property settlement?

Can you divorce without a property settlement?

It is absolutely possible to get a divorce order without having a property settlement in place. In fact, the opposite is true as well – you can get a property settlement without being divorced.

A divorce and a property settlement are actually two separate legal proceedings. And a property settlement will be entered into independently of a divorce application.

That being said, there are a lot of reasons why it’s a very good idea to get a property settlement as soon as possible. So here’s what you need to consider when deciding on the timing of your property settlement and your divorce.

The relationship between a divorce order and a property settlement

A divorce order is made by the Federal Circuit and Family Court of Australia. The divorce order’s job is to terminate a marriage relationship. But it doesn’t include any orders about the property of the parties. That means that you could be technically divorced, but still financially responsible for various debts and obligations as a couple.

On the other hand, a property settlement is an order or agreement that divides the assets, liabilities, superannuation and all other financial matters of a couple who has decided to separate or divorce.

Divorce without a property settlement

While a property settlement is not included in a divorce, and it’s not required prior to divorce, it’s an important part of your overall separation. Often, couples are so keen to move on from their relationship that they want to get divorced as soon as possible while leaving the more challenging property negotiations for a later time. 

In Australia, you are required to have been separated for a minimum of 12 months before you can legally divorce. In our experience, this time period is a good time to start to work out your property settlement. The longer you leave these financial issues, the more difficult it can be to reach an agreement, and the more challenging issues can arise. 

And divorcing without a property settlement can leave you open to some risks. 

Your asset pool may change

Over time your asset pool is highly likely to change. And it’s important to understand that the assets, liabilities and financial resources of you and your ex-partner will be divided as at the date of the property settlement agreement, NOT at the date of your separation.

So, after your separation, you and your ex-partner will continue to add to your superannuation. You may continue to earn an income. The family home may appreciate in value – or depreciate if it’s not maintained well. You may receive an inheritance or start a new business. Your ex may start to accumulate more debt as well.

If these things happen before you settle your property matters, they would become part of the property pool at the time of the property settlement – both the additional assets and the additional debt. And that could see you losing out in the long run.

Addressing all your property matters as soon as possible after separation limits the number of changes that might occur to the property pool, making negotiation easier. It can be very difficult to seek reimbursement if you provide a spouse with financial support during this time that isn’t then awarded to them during property settlement.

There are strict time limitations

The Family Law Act 1975 does impose time limits on when you are permitted to seek a property settlement. For a couple that was in a de facto relationship, you have two years from the date of separation. For a married couple, you have one year from the date of your divorce order.

Once the time limit has expired, it becomes much more difficult to seek a property settlement from your ex-partner. You would have to prove that you, or your children, will suffer unjust financial hardship if not allowed to seek a property settlement. You’ll also have to explain to the court why you failed to meet the time limitations in the first place.

Can you divorce without a property settlement? Yes… but you shouldn’t!

In our experience, the focus should be on your property settlement rather than your divorce.

If you’re feeling overwhelmed by the thought of managing a divorce and property settlement at the same time, don’t worry. You’re not alone. We’re here to help you with compassionate expertise that will help you have a ‘good divorce’ in the sense of getting the best outcomes with the least amount of stress and heartache.

Get in touch today, and let us help you on your way to the smoothest property settlement possible.


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