Going through a separation can be emotionally and financially challenging. Protecting your assets is a priority that shouldn’t be overlooked during this difficult time. Tonkin Family Lawyers recommend taking practical steps early to safeguard your financial future. This guide outlines the essential actions for Australian couples facing separation, whether married or in de facto relationships.
Table of Contents
Key Takeaways
How Property is Divided in Australia
The division of property after separation follows specific legal principles in Australia. Understanding these fundamentals helps you make informed decisions about protecting your assets.
Key Legal Framework
The Family Law Act governs property settlements for married couples nationwide, while de facto couples fall under the same provisions in all states except Western Australia. The Federal Circuit and Family Court of Australia handles most property disputes.
De facto partners should note they typically have two years from separation to file property applications, while married couples have one year from divorce finalisation.
Contributions and Future Needs
Courts assess both financial contributions (income, savings, property brought into the relationship) and non-financial contributions (homemaking, parenting). They also consider future needs factors like care of children, health issues, and earning capacity when determining fair division.
Time Limits and Urgent Remedies
Acting promptly is crucial. Missing the statutory time limits can seriously impact your rights to property settlement. In situations where assets might be at risk of being sold, transferred or devalued, you can seek urgent injunctions or freezing orders from the court.
Immediate Steps After Separation
The actions you take in the first days and weeks after separation can significantly affect your financial position.
Secure Documents and Accounts
Start by gathering and securing all important financial records:
Where appropriate, change passwords on your personal accounts and email. If you’re concerned about financial abuse, consider opening a new bank account solely in your name.
Manage Joint Finances and Liabilities
Joint accounts require careful handling. Consider notifying your bank of the separation and requesting that withdrawals require both signatures. For credit cards, contact providers to freeze joint cards or remove yourself as a secondary cardholder where possible.
Review all loans and ongoing financial commitments. Document your current financial position, including assets, liabilities and regular expenses.
Preserve Asset Values
Avoid selling, transferring, or gifting assets without legal advice. Courts look unfavourably on attempts to diminish the asset pool. If large transactions are necessary, document the reasons and keep records of where funds are directed.
“The most effective asset protection starts with thorough documentation and swift action to secure your financial position immediately after separation.” – Tonkin Legal
Legal Tools to Protect Assets
Several legal mechanisms can help protect your assets during and after separation.
Binding Financial Agreements
These agreements (sometimes called prenuptial or postnuptial agreements) can be made before, during or after a relationship. They outline how assets will be divided if the relationship ends.
For these agreements to be legally binding, both parties must receive independent legal advice, and the agreement must comply with specific formal requirements under the Family Law Act.
Consent Orders and Negotiated Settlements
Once you’ve reached agreement on property division, formalising it through consent orders provides legal protection. These court-approved orders are enforceable and provide finality to financial matters.
Negotiated settlements, whether through direct discussion, mediation, or lawyer-assisted negotiation, often provide better outcomes than court-imposed decisions.
Urgent Court Applications
In situations where assets are at immediate risk, such as when a former partner is selling property or emptying accounts, you can apply for injunctions or freezing orders. These court orders prevent specific actions until property matters are properly addressed.
Protecting Specific Asset Types
Different assets require different protection strategies during separation.
Real Estate and Home Ownership
For the family home and investment properties, consider lodging a caveat on any property solely in your partner’s name to which you believe you have a legitimate claim. This prevents sale without your knowledge.
If you remain in the family home, keep paying the mortgage if possible, even if temporarily, to protect your credit rating and equity position.
Businesses and Shares
Business assets require particular attention. Document the current state of the business, including contracts, inventory, client lists, and financial records. Consider interim operating agreements if you run a business together.
For publicly traded shares or investments, monitor accounts closely and maintain records of holdings at the date of separation.
Superannuation
Superannuation is treated as property in Australian family law and can be split between separating couples. Gather statements for all super accounts and consider getting formal valuations, especially for self-managed super funds.
Trusts and Family Structures
Complex structures like family trusts, companies, or partnership arrangements require specialised legal advice. Courts can look through these structures in property settlements, so transparency is advisable.
Financial Planning and Record Keeping
Thorough financial documentation strengthens your position in property negotiations.
Maintain a file of all financial records, including receipts for major purchases, home improvements, and any significant contributions to joint assets. Digital records should be backed up securely.
Consider consulting a financial adviser about immediate money management strategies and longer-term financial planning. For complex situations involving substantial assets or businesses, a forensic accountant can help trace assets and document financial histories.
Working with Professionals
Selecting the right professionals helps protect your assets effectively during separation.
When choosing a family lawyer, look for expertise in property matters similar to yours. Local knowledge can be valuable, as can experience with your specific asset types. Consider fee structures and communication style when selecting representation.
Family dispute resolution services can help resolve property issues without court involvement, often saving time and money while achieving fair outcomes.
Common Mistakes to Avoid
Several actions can significantly weaken your position in property settlements:
Timing errors are also common. Waiting too long to seek advice or file applications can limit your options for asset protection.
Conclusion
Protecting your assets during separation requires prompt action, thorough documentation, and professional guidance. By understanding the legal framework, securing important documents, and taking appropriate steps for different asset types, you can safeguard your financial future during this challenging time.
Start by gathering financial records, securing accounts, and seeking qualified legal advice about your specific situation. Tonkin Legal recommends addressing these matters as early as possible in the separation process to achieve the best outcomes. Reach out to experienced family law professionals who can guide you through the process and help protect what matters most.
