Your ex might want to buy a shiny new car with your money – but are you entitled to stop them?

09 January 2012 Topics: Family law

Have you been divorced from a former spouse? Were you previously in a de facto relationship that ended? If your answer to either of those questions is ‘yes’, and you never formalised your property settlement with the ex, you might have cause for concern.

Section 44(3) of the Family Law Act 1975 provides that former spouses have 12 months from the date of their divorce to commence property settlement proceedings before they are out of time. The equivalent time limit for ex de facto partners pursuant to section 44(5) is two years from the date the relationship ended.

Well, that’s good news, right? If I divorced my former spouse a few years ago, they’re not going to be able to file a property application against me are they? Actually, that’s not quite correct.

Even if parties are out of time, they may commence property settlement proceedings at any point in the future if they can satisfy the court that hardship would be caused to them, or a child, if leave were not granted.

That is a significant proviso. It means that, irrespective of how many years have elapsed since the parties divorced, if one of them has fallen on hard times and can show that they would suffer hardship if leave was not granted, they will be entitled to file a property application.

Just as worryingly, if you file an application against a former partner in relation to non-property matters, they may seek orders in their responsive documents concerning property settlement and completely bypass the requirement to first obtain leave.

Although this applies equally to de facto relationships, it is worth noting that federal jurisdiction in respect of de facto property settlement only commenced on 1 March 2009. Any de facto couples who separated prior to this date are subject to the property laws of their particular state unless they both choose to ‘opt in’ to the federal jurisdiction.

You might think it very unlikely that a former spouse or de facto partner would try to file a property application against you many years after separation. However, in our experience, it is not uncommon and can cause significant distress to the party responding to the application.

For instance, imagine moving in with a new partner only to find out that their spouse from another life has commenced property settlement proceedings against them and you are going to be dragged into their dispute.

Fortunately, there is a way to prevent such scenarios from occurring. Aside from blindly hoping your ex won’t make a move for your money, if you formalise your property settlement in a way recognised by the law then this will prevent either party from filing a property application later down the track.

To formalise your property settlement, you can either obtain a Court Order by consent that addresses property matters or enter into a Binding Financial Agreement. There are pros and cons for each and it would be prudent for you to speak with an experienced family lawyer about which document best suits your needs.

We strongly recommend to all our clients from separated marriages or de facto relationships that they formalise their property settlement to avoid the heartache associated with responding to an application made by a former partner.

We have a very experienced family law team at Cooper Grace Ward and would be delighted to assist you with any queries you may have regarding property settlement matters.

For further information please contact Craig Turvey of Cooper Grace Ward’s Family Law team via +61 7 3231 2569 or craig.turvey@cgw.com.au.

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This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please let us know.