The end of a relationship—whether a marriage or a de facto partnership—brings not only emotional upheaval but also a raft of legal and financial challenges. One of the most significant is property settlement after separation. When assets are jointly owned, division can be complex. Assets acquired at different times may complicate matters, and personal and financial entanglements add further difficulty. As a result, untangling everything can become contentious.
Understanding how the law interprets and manages these entwinements is essential for anyone navigating separation.
Property Settlement After a Marriage Ends
For those going through a divorce, settling property matters is typically part of the broader divorce process. In Australia, the Federal Circuit and Family Court of Australia oversee these matters, depending on the jurisdiction.
Key facts:
- Parties must make a property settlement application within 12 months of the divorce becoming final.
- Property settlement includes all assets—homes, cars, investments, superannuation, and even debts—regardless of whose name they are in.
- The court aims to reach a fair and equitable division, not necessarily a 50/50 split, but one that reflects each party’s contributions (both financial and non-financial) and future needs.
Property Settlement After Separation: De Facto Relationships
Unlike a marriage, divorce usually resolves property matters. De facto separations often involve a more nuanced legal process. Property settlement after separation in de facto relationships can be more complex. Different legal options apply depending on the relationship’s nature. The outcome also depends on any agreement between the parties.
Following separation, it is essential for both parties to obtain independent legal advice from a qualified family lawyer. This ensures each party understands their legal rights and responsibilities and can make informed decisions about how to proceed.
Under the Family Law Act 1975, de facto partners have 24 months from the date of separation to initiate a property settlement claim.
There are three primary options for settling property matters after a de facto separation:
- Informal Agreement
- Binding Financial Agreement
- Consent Orders
Informal Agreement
An informal agreement involves the former partners reaching an arrangement without formal legal assistance or court involvement. While this may seem simpler or less confrontational, the law does not recognise informal agreements as legally binding. A court cannot enforce them if one party later fails to uphold their end of the deal.
Importantly, if any transfer of ownership occurs—such as a home, vehicle, or other significant asset—stamp duty will generally be payable, as the transaction is not exempt. The law grants stamp duty exemptions only when the parties formalise the agreement through a consent order or binding financial agreement.
Due to the risks and lack of enforceability, this method is generally not recommended.
Consent Orders
Consent orders are legally binding agreements approved by the Family Court. Either party may apply to the court to formalise a property agreement as a consent order. If the court finds the arrangement fair and equitable, it issues the orders and makes them legally enforceable.
Once consent orders are in place, neither party can make further property claims, offering both finality and legal protection. Many parties use this method as a reliable way to formalise a property settlement without needing ongoing litigation.
Binding Financial Agreement
Two people in a relationship—whether married, in a de facto relationship, or planning to enter one—can enter into a Binding Financial Agreement (BFA), which the law recognises as a legally enforceable contract. It sets out how they will divide assets, liabilities, and financial resources if the relationship breaks down.
Unlike consent orders, a BFA does not require court approval to be valid. However, for it to be legally binding and enforceable, strict legal requirements must be met.
Each party must obtain independent legal advice before signing the agreement. This is a mandatory step to ensure both individuals understand the advantages and disadvantages of finalising property matters through a BFA. In addition, each party’s solicitor must give the required advice and sign a certificate confirming they have provided it.
A properly executed BFA provides clarity, can prevent future disputes, and allows couples to tailor their financial arrangements without court involvement.
If you can’t decide – how will the Courts settle property?
When separated parties are unable to reach a property settlement agreement on their own, the Family Court will intervene to ensure a fair and equitable outcome. The court follows a structured process under the Family Law Act 1975 to determine how assets and liabilities should be divided.
The court will:
- Assess whether it is just and equitable to make a property order at all.
- Identify and value the property pool, including all assets, liabilities, and superannuation entitlements.
- Evaluate each party’s contributions, both financial (e.g. income, property) and non-financial (e.g. caregiving, homemaking).
- Consider the future needs of each party—factors like age, health, income potential, and parenting responsibilities are considered.
If proceedings are underway and the parties reach an agreement during the process, they may apply for a Consent Order (also known as Terms of Settlement). The court will review the proposed terms and, if satisfied they are just and equitable, make the agreement legally binding.
Separation is never easy—emotionally, legally, or financially. Whether you’re ending a marriage or a de facto relationship, understanding your options for property settlement is crucial. From informal agreements to court orders, the path you choose can have long-lasting implications. Seek early legal advice and approach the process with clarity and care to handle your separation fairly, efficiently, and with minimal conflict.
Jake McKinley notes that this article is written for the purpose of providing generalised information and not to provide specialised legal advice. If you require qualified legal advice on anything mentioned in this article, our experienced team of solicitors at Jake McKinley are here to help. Please get in touch with us on 02 9232 8033 today to make an enquiry.
