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Making decisions about fair division of property and assets
When couples separate they may need to make decisions about how to distribute property, finances and debts. Property mediation can assist to work out your property and financial settlement.
Property and assets may be divided between you and your partner by:
- Going to court, or
- Using a family dispute resolution service to help reach agreement.
Division of property and assets is not always straight forward. It is always recommended that you get legal advice to begin with so you understand your position fully, even if you can amicably reach an agreement.
It is important to reach a defined agreement through mediation in order to avoid future conflict from misunderstandings.
Mediation provides separating couples with a significantly lower cost option than being represented in family court by a lawyer. Court proceedings can be lengthy, stressful and could take up to a year to get the first (of what could be many) court appearances.
The mediator provides a structured conversation that supports separating couples equally, to negotiate an agreement between themselves.
A skilled, neutral mediator will provide a confidential and voluntary process. This requires both parties to be willing to participate and to agree to provide full and frank financial disclosure to each other.
When can we start the process of dividing our property and finances?
You can start property mediation process at any time after you have made the decision to separate.
However, there are time limits that apply if you are unable to reach agreement, and decide to apply to court:
- Within 12 months of a divorce for married couples
- Within two years of the relationship ending for de facto couples.
Do we need to get legal advice?
Mediators are unable to provide advice to parties so it is important that each of you have a good understanding of your legal position so that you can negotiate effectively in mediation.
Our mediators can provide both parties with information on where to seek legal advice.
How many sessions will I have to attend?
Generally two joint mediation sessions are adequate but this depends on individual circumstances.
Each party will have an initial one on one assessment (up to 90 minutes) with the mediator to talk through your respective financial situations and to begin compiling the information that you will need for the property and financial settlement process.
Provided that your matter is assessed as suitable to proceed, a joint session (2 hours duration) will be arranged for both parties to come together (not necessarily in the same room) to begin settlement discussions. Further joint sessions may be arranged if needed.
What is the process?
The process can be described in four steps:
Identify and evaluate assets
You will individually list all assets and liabilities with the assistance of the mediator and work towards an agreed asset pool. Full financial disclosure is essential including exchanging documents such as statements, valuation and bank account statements.
Determine party contributions
Substantial and significant contributions that you each have made throughout the course of the relationship will be captured, these include house deposits and renovations. Documenting these helps you both to understand each other’s contributions, both financially and non financially, and can include contributions from other family members.
Identify needs and outcomes
The mediator will help parties to consider what their needs will be moving forward (eg. Finding somewhere to live, ensuring that children are cared for, engaging in study to be able to find employment). Amongst other factors, your income, earning capacity, skills and qualifications are considered at this point. Your future needs may have an impact on the final outcome of the settlement. to be fair and reasonable in your situation.
Negotiate and agree on division of assets
The final step in the financial and property settlement process is making decisions about what the settlement will be. This is often reflected in a percentage figure. Your mediator may also assist you to consider practicalities like; getting a house ready for sale, dissolving bank accounts or share portfolios, dealing with personal effects and distribution of furniture.
What happens next?
If you reach an agreement regarding your property and financial settlement you may request that your mediator types up a document reflecting this to share with both parties. This agreement is not legally binding or enforceable but may assist you or your lawyer with the preparation of Consent Orders or a Binding Financial Agreement. It is strongly recommended that you formalise your financial settlement in one of these ways in order for it to be legally binding.
If you do not reach an agreement, you will leave with a clearer understanding of the issues and will be provided with a copy of the notes taken.
If there is no more room for negotiation and no further mediation session are of benefit, then an application to court or negotiation through lawyers may be the next appropriate step.
The value of property can be significantly diminished by the costs of going through legal and court processes. Coming to agreement through the property mediation process maintains the value of your assets and preserves the wellbeing of all concerned.
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