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How can mediation assist in a property settlement?
Family Dispute Resolution (or mediation) is not a requirement of the Family Court when you are filing for financial orders only and when there are no children involved (please refer to here for further details about when the Family Court requires mediation to be undertaken). However, mediation can be an extremely useful vehicle for resolving property disputes and should not be overlooked simply by not being a compulsory pre-action procedure of the Family Court process. What is the role of mediation for property settlement?
Mediation provides a safe environment for both you and your ex-partner to have a conversation about dividing real estate, superannuation, bank accounts and other assets. The mediator facilitates this conversation and assists you and your ex-partner to negotiate with each other to work towards achieving an agreement. Regardless of whether you or your ex-partner requested the mediation, we are a neutral party and will treat you both equally and fairly. Mediation is a less costly process than a litigation process through the Family Court, from $1,300.00 per party for a mediation, as opposed to the costs of going to trial in the Family Court, at over $50,000.00 per party. A mediation is a collaborative process (not an adversarial process), so it does not end with a “winner” and a “loser” but rather with a mutual agreement that both parties can live with. To prepare for a mediation regarding property, you will need to gather numerous documents relating to the assets and liabilities, including but not limited to land titles, mortgage documents, vehicle registrations, personal bank loans and overdraft facilities, credit card statements, business documents, and superannuation statements. During your intake session with us, we will guide you concerning which documents will be required. These documents help you to identify what assets you had prior to the marriage or relationship, what assets you gained during the marriage or relationship, and then what assets you have acquired after the divorce or separation. It is important that – even if you are proceeding with a mediation process – you seek independent legal advice, so that you have an understanding of how assets are distributed according to the Family Law Act 1975 (Cth) and to prepare you for the mediation with a range of what you could expect as an outcome if your matter did go to the Family Court. This will ensure that you are able to make an informed decision and participate fully in the mediation to reach an agreement. How would the Family Court assess a property settlement?
There are four steps that the Family Court will take to decide on a property settlement:
1. Establishing the Total Assets The Family Court will assess all the assets and financial resources of both parties and what the value of all of these are. They will then take into account all liabilities to work out a net property pool. 2. Determining Contributions The Family Court will look at direct contributions to the property pool, which can include things like wages, lump sum payments and windfalls; these will be further scrutinised by contributions at the beginning of the relationship, during the relationship, and after the relationship has ended. Non-financial contributions such as parenting, home-duties and improvements will also be fairly considered. 3. Assessing Future Needs The ages, health, resources, care of children, commitments, standard of living and income-earning capacity of both of the parties (amongst other considerations) will be assessed by the Family Court when determining a property settlement. 4. Determining Practicality Finally, the Family Court will assess whether the proposed division of the property pool is fair and equitable and practical to achieve. How can I formalise my agreement relating to property?
If you and your ex-partner reach an agreement during the mediation, then the mediator will prepare a written document detailing the agreements made during the mediation. This document (although useful as a record of the parties’ agreement) is not a legally binding document. There are two ways that you and your ex-partner can make your agreement legally binding:
Our mediators act as a neutral third party assisting parties in reaching agreements. To remain impartial and unbiased throughout the mediation process, our mediators do not engage in legal practice or act as lawyers or provide legal advice in any way, and for this reason are not permitted to write your agreements as a Binding Financial Agreement or Consent Orders. You will need to engage your lawyer to do so from the mediation agreements. What is a Binding Financial Agreement?
A Binding Financial Agreement is a legally binding and enforceable financial agreement relating to a married or de facto couple’s property. A Binding Financial Agreement can be made at any point prior to the relationship, during the relationship, or after a relationship has ended. Commonly a Binding Financial Agreement made prior to marriage is called a “pre-nuptial agreement”. A Binding Financial Agreement generally states how assets and money will be divided and how one or both parties in the relationship will be maintained, amongst other issues. For a Binding Financial Agreement to be legally binding:
A Binding Financial Agreement can only be unenforceable:
Often a Binding Financial Agreement will be selected over Consent Orders, as the terms in a Binding Financial Agreement do not have to be fair or just and equitable, and it is not scrutinised by the Family Court. Further, a Binding Financial Agreement can be particularly useful if one of the parties is trying to prevent a future claim for spousal maintenance. However, a Binding Financial Agreement cannot address any issues of parenting and therefore may not be the best choice for couples with children, where Consent Orders may be more appropriate. What are Consent Orders for property?
Draft Consent Orders are filed at the Family Court by way of an Application for Consent Orders. The Family Court will only ratify the Draft Consent Orders into Consent Orders if they are “just and equitable”, by assessing whether or not the Draft Consent Orders are fair and reasonable to both parties. Consent Orders are often made for both parenting and property aspects of the parties’ agreement at the same time, which simply cannot be achieved by way of a Binding Financial Agreement. A major benefit of Consent Orders is that they are much more cost effective than a Binding Financial Agreement, as the parties can complete the Application themselves and do not require a solicitor to complete or witness the Application. For this reason, we write the agreements that you and your ex-partner reach at mediation in the format of Draft Consent Orders, so that you can then file them in the Family Court. Only after the Family Court has reviewed the Draft Consent Orders and stamped them do they become Consent Orders that are legally enforceable. What happens if no agreement for property is reached at mediation?
It is important to note that the mediation process is a confidential one, so if agreement is not reached through mediation and you decide to proceed with an application to the Family Court, then anything said during mediation is inadmissible in proceedings in the Family Court. This is to ensure that the parties can have an open and frank discussion during mediation to enable them to have the best possible opportunity to resolve the dispute without fear of retribution.
What are the time limits for a property settlement?
It is important to remember that, to file a property settlement to the Family Court under the Family Law Act 1975 (Cth), there are time limits that must be considered. A property application must be filed within one year of a divorce being finalised (namely, one year after a certificate of divorce has been issued by the Family Court), or within two years after separation if the couple involved is a de facto couple. Special leave can be applied for if the time limit has expired; however, special leave is only granted in some circumstances, so the time limit should be adhered to. If you believe that you may have missed the time limit, then it is important to seek legal advice. Our mediators act as a neutral third party assisting parties in reaching agreements. To remain impartial and unbiased throughout the mediation process, our mediators do not engage in legal practice or act as lawyers or provide legal advice in any way. Furthermore, Family Mediation Direct provides mediation services only. Family Mediation Direct is not a law firm, does not engage in legal practice, does not act as lawyers, and does not provide legal advice in any way. To start the mediation process, simply complete the form: |
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More Information on Mediation & Family Dispute Resolution
- Family Dispute Resolution
- Parenting Plans
- Financial Agreements
- Child-Inclusive Mediation
- Section 60I Certificates
- Child Support
- Child Support Calculator
- De Facto Relationships & Separation
- Divorce & Mediation
- Grandparents & Mediation for Grandchildren
- Parenting Plan & Draft Consent Orders for Children
- Property Settlement at Mediation
- Mediation & Domestic Violence
- Relocation & Overseas Travel with a Child
- Going to the Family Court versus Mediation
- Family Dispute Resolution & Mediation
- Child Support & Mediation
DISCLAIMER: The information contained on this website is for general guidance only. No person should act or refrain from acting on the basis of this information. Professional legal advice should be sought based upon your particular circumstances, because laws and regulations undergo frequent changes.
