Introduction
In 2017, Australian Law recognised same-sex marriages, granting them the same legal rights and obligations as heterosexual couples. Similarly, individuals who live together on a domestic basis but are not legally married are also recognised as de facto relationships and have rights such as married couples do. When it comes to asset division in these types of relationships it is important to understand the issues that can result, which is what will be discussed in this article.
1. The Family Law Act 1975
The Family Law Act 1975 (Cth) is the legislation that regulates all things regarding family matters. This includes but is not limited to:
- Divorce
- Parenting Arrangements
- Property settlements
- Financial Maintenance
This Act is a guiding principle when it comes to asset division — whether financial or non-financial — for all marriages in Australia and is important to understand when discussing key legal issues and considerations.
2. Asset Division Process
Although every process varies in Australia, the most common division of assets is a 60/40 split. The process below is a general idea of how a conclusion is made regarding the division in marriages.
- a. Identify and Value Assets: The first steps are to recognise each party’s assets and liabilities. Some of which include real estate, investments, and even debts.
- b. Assess Contributions: The court analyzes and considers each party’s financial and non-financial contributions.
- c. Consider Future Needs: The court then decides the financial needs of both parties in the future as well as for children or dependents.
- d. Achieve a Just and Equitable Settlement: There are multiple ways for a party to come to an agreement, whether it’s private or with legal assistance. If legal assistance is not necessary, it can be made official through a consent order. If an agreement cannot be made, an application to the Federal Circuit and Family Court of Australia will need to be made and a Court Order will be issued to come to a fair division of assets.
3. Key Legal Issues and Considerations
- a. Time Limits: Married couples must apply for property settlements within 12 months of divorce under Section 44(3) of the Family Law Act.
- b. Binding Financial Agreements: Same-sex couples can make BFAs specifying asset division before, during, or after a relationship. This can be a proactive step to take in order to ensure a smoother process of asset division.
- c. Superannuation: This mandatory retirement saving system in Australia requires employers to put a percentage of an employee’s salary into an investment fund. In terms of asset division, these funds are treated as property but are held in a trust until retirement. This can be split via a Superannuation Splitting Order.
- d. Agreements: If possible, it can be important to consider trying to come to an agreement about assets privately. This can be cost effective and eliminate having to go to court, which often can be a very time-consuming process. If this is not an option, it is important to get legal advice before proceeding to act in court.
- e. International Recognition: Same-sex marriages performed overseas are recognized in Australia, but complications can occur if one partner resides in a country that does not recognize same-sex marriage, potentially impacting asset division which can be important to understand.
In Summary
Divorce and/or separation can be extremely stressful and difficult periods for individuals to overcome. When it comes to asset division, understanding the steps as well as what to look out for can make the process much smoother and eliminate further issues. Understanding the rights and obligations under the Australian Family Law is essential for same-sex couples to receive a fair property agreement.
By Elle Laney, INTERN at OpenLegal
