The breakdown of a relationship or marriage is often a time that is highly emotional and stressful, and is almost always a significant life change.
In and amongst all of the emotional struggles of a breakdown of marriage or defacto relationship, the separating parties must deal with how they are to deal with shared and individual assets and liabilities. Often long term defacto relationships and marriages involve jointly owned properties, mortgages, motor vehicles and other assets and liabilities.
In our experience, most couples are able to agree on how assets should be divided (known as “property settlement”), and arrangements may involve the jointly owned property being sold and the proceeds divided, or the joint property being transferred into one of the parties’ sole names. Whatever the agreement may be, it is advisable to formalise that agreement in a legal document. There are several reasons for doing this:
• To ensure that the agreement is clear and concise and legally binding.
• To achieve a sense of closure.
• To ensure that neither party can make a claim on the other in the future and thus obtain certainty.
• To achieve an exemption from stamp duty when transferring a piece of property to the other party.
In some cases, a separated couple are unfortunately unable to agree on how assets and liabilities should be divided. If this occurs, it may be that you would need to retain legal representation to advise you of your rights and enter into negotiations on your behalf with your ex-defacto partner. In some cases where agreement simply cannot be reached, the only way to resolve the matter may be to proceed to court. However, it is our view that people who have gone through a separation are often more satisfied with the outcome in the circumstances where they can agree on it, whether that be through negotiation or between themselves without legal intervention at all.
There are different ways in which these types of property settlement agreements can be legally documented, and if you are in a situation where you have separated and you want to formalise your agreement, we invite you to contact us to discuss your options.