Dividing Property During Separation or Divorce in New South Wales: A Guide to the FCFCOA Process

Key Takeaways:

• Importance of Timely Resolution: It’s advisable to resolve property settlements before applying for divorce due to a twelve-month time limit for claims once an Order for divorce is made.
• Role of the FCFCOA: The Federal Circuit and Family Court of Australia oversees property division and divorce, ensuring fair outcomes based on contributions and future needs of both parties.
• Definition of Property: Property includes all assets and liabilities acquired before as well as during the relationship, such as homes, cars, bank accounts, superannuation, and businesses.
• The Four-Step Process:

1. • Identifying and Valuing Property
   • Assessing Contributions
   • Considering Future Needs
   • Making Orders

• Resolving the matter outside of Court: It’s recommended to resolve property division through negotiation or mediation before going to Court to minimise costs and stress. Many individuals can reach agreements without Court involvement, which can be formalised through a Consent Order to ensure legal enforceability.
• Going to Court: Comply with the pre-action procedures set our in Schedule 1 of the Family Law Rules, File a Genuine Steps Certificate and if superannuation is involved in your property division, to make sure you have complied with the procedural fairness requirements of the Superannuation Fund.
• Legal Support: Seeking advice from family lawyers can help navigate the process and protect rights.

Introduction

Separation and divorce are challenging experiences, and one of the most stressful parts can be dividing the property you and your partner accumulated during your relationship. Whether it’s a family home, savings, or other assets, understanding the legal process can make a huge difference in how fairly the property is divided. It is best to resolve your property settlement prior to applying for Divorce as this creates a time limitation of twelve months in which you have to make your claim. Twelve months sounds like a long time but by the time you have attended mediation and then enter the Court system, twelve months can go by very quickly.

In New South Wales (NSW), this process is governed by the Federal Circuit and Family Court of Australia (FCFCOA) and is guided by the laws of the Family Law Act 1975.

What is the FCFCOA?

The Federal Circuit and Family Court of Australia (FCFCOA) handles family law matters, including the division of property after separation or divorce. The Court’s main focus is to ensure a fair division of property, considering the needs and contributions of both parties.

What is Considered Property?

Property doesn’t just refer to physical assets like the family home or car. It also includes things like bank accounts, superannuation (retirement funds), investments, debts, and even businesses. Essentially, any financial or physical asset that was acquired before and during the relationship could be considered part of the property pool that needs to be divided.

How is Property Divided?

The division of property is based on a four-step process which the Court follows to determine whether a just and equitable outcome has been reached, this process aims to be fair, rather than necessarily equal. Here’s a breakdown:

1. Identifying and Valuing Property

The first step is to identify all assets, liabilities, and financial resources, such as bank accounts, properties, superannuation, and debts. These items are then valued so that an accurate picture of the property pool is established.

2. Assessing Contributions

Both financial and non-financial contributions are taken into account. Financial contributions include things like income earned and money invested in the property or business. Non-financial contributions can include home-maker tasks and parenting, and even the effort put into managing the household. Contributions made during the relationship are considered, but also the contributions made after separation may be looked at, especially if the property was maintained or improved and how this was done i.e. by way of your own labour or hiring a trade. Other factors such as length of the relationship and sacrifices a party has made are taken into account when assessing contributions.

3. Considering Future Needs

The Court also looks at the future needs of each party, such as:

• The age and health of each person
• The care of children
• Each party’s ability to support themselves financially

This stage helps ensure that the division takes into account who may be in more need of support or assets going forward.

4. Making Orders

After considering all the factors above, the Court will make a property settlement order. This order determines how the property is to be divided, whether through a lump sum payment, transfer of property, or other arrangements.

How Do You Get to the Court?

Before going to the Federal Circuit and Family Court of Australia, you should try to resolve the division of property with your ex-partner through negotiation or mediation. It’s cheaper and less stressful to come to an agreement outside of Court.

If you can’t agree, you might consider involving a mediator, a lawyer, or even starting the Court process. Commencing Court proceedings can be done by:

1. Complying with the pre-action procedures in Schedule 1 of the Family Law Rules.
2. Filing an initiating application.
3. File a Genuine Steps Certificate stating that you have attempted to resolve the matter, complied with the pre-action procedures and that you have provided full and frank disclosure.
4. If there is superannuation involved in your property division, then the trustee of the Superannuation Fund that is paying the super needs to be notified of the superannuation split that is to take place not less than 28 days before filing the Application with the Court (This is called procedural fairness).

Can You Avoid Going to Court?

Yes! Many people can reach an agreement about property division without having to go to Court. This might involve negotiating directly with your ex-partner, getting help from lawyers, or attending mediation sessions. If you do agree, it’s wise to have the arrangement legally formalised through a Consent Order which ensures that both parties are legally bound by the agreement.

Dividing property after separation or divorce can feel overwhelming, but understanding the legal process in New South Wales under the Federal Circuit and Family Court of Australia can help you approach it with more confidence.

At Berryman Partners, we are here to support you by carefully assessing the contributions of both parties, considering future needs, and exploring alternatives to avoid Court proceedings. Our goal is to guide you toward a fair and just resolution.

If you’re uncertain about the process or require family law advice in relation to Divorce or a property settlement, please do not hesitate to contact us at (02) 4943 3988. One of our experienced family lawyers can help guide you through this process and help you protect your rights.

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This blog was written by Solicitor,

 Maxcine Taylor

Maxcine practices in the areas of Family Law, Wills & Estate Planning,

and Deceased Estates