Many people focus on the emotional side of a separation and leave the money until later. That is understandable, but later can become too late. Australian family law sets firm time limits for asking a court to divide property. Missing them can make a claim much harder to bring.
This article explains the time limits for married and de facto couples. It covers what happens if you apply late and how a formal agreement can help. It also notes the different rules for de facto couples in Western Australia. It is general information only, and the law can change.
What property settlement means
Property settlement is the process of dividing assets, debts and financial resources after separation. The Family Law Act 1975 sets out the law for couples who are or were married or in a de facto relationship. You can apply for property settlement at any time after you separate. You do not need to wait for a divorce first.
Many couples reach agreement without a court deciding the outcome. Even so, the time limits still matter. They decide how long you have to ask a court for orders if talks break down. They also affect how long your former partner has to bring a claim against you.
The time limit for married couples
If you were married, you can apply at any time from separation until you divorce. Once the divorce order takes effect, you have 12 months to apply for property and financial orders. The Legal Aid NSW LawPrompt page on property settlement points out that the year runs from when the divorce order comes into effect. It is not counted from the day you separated.
This can catch out people who divorce quickly and assume property can wait. A divorce application can be made once you have been separated for 12 months. The property clock then starts once the divorce takes effect. If you are close to finalising a divorce, it pays to think about property at the same time.
The time limit for de facto couples
For de facto couples, the time limit is two years from the date of separation. There is no divorce to start the clock, so the separation date matters a great deal. A disagreement about when the relationship ended can affect whether a claim is in time. Keeping a record of the date and what happened can help later.
Not every de facto couple can apply for a property settlement. Legal Aid NSW lists the usual pathways, and you only need to meet one of them. A lawyer can tell you whether your relationship meets the test. The pathways are set out below.
- you lived together for more than two years
- you have a child together
- you made significant contributions to the property
- you registered your relationship under a state or territory law
Western Australia is different for de facto couples
Western Australia handles de facto property matters under its own law. Legal Aid WA on de facto relationships explains that the Family Court Act 1997 (WA) applies to de facto relationships there. The time limit is the same two years from separation. After that, you need the court’s permission to apply, and it is not always granted.
The Family Court of Western Australia can hear a de facto property application if either person lives in WA on the day of filing. One more condition must also be met. The couple must have lived in WA for at least a third of the relationship or made substantial financial contributions in WA. This is a good example of why state differences matter.
What happens if you miss the deadline
Missing the deadline does not always end a claim. The court can give a person leave, meaning permission, to apply after the time limit. Legal Aid ACT says this is only possible in limited circumstances. Legal Aid WA also notes that leave is not always granted.
A late application adds cost, delay and uncertainty. It also means you are relying on the court’s discretion rather than a clear right to apply. Getting legal advice early is the simplest way to avoid this position. Free advice from a legal aid office or community legal centre is a good place to start.
Formalising an agreement
A simple way to avoid time limit problems is to put any agreement into a formal, binding form. The two common options are consent orders and a binding financial agreement. Our article on the differences between a consent order and a binding financial agreement explains how each works. Legal Aid ACT notes that in the ACT both can give an exemption from stamp duty on property transfers. Check the duty rules in your own state or territory.
Consent orders are made by the court when both people agree on how to divide their property. Once made, they are binding and enforceable. A financial agreement can be made before, during or after a relationship. It must be in writing and signed by both people after each gets independent legal advice, with a lawyer’s certificate confirming that advice.
An informal agreement may feel fine at the time. Without a formal written agreement, though, a further claim can still be made within the time limits. Legal Aid ACT gives this as a reason to formalise any deal. A written, binding agreement gives both people more certainty.
Steps to take soon after separation
Start by writing down your separation date and the key events around it. Collect records of bank accounts, loans and other assets. Mediation is often a good first step in settling disagreements about property. Legal Aid ACT describes it as a way to avoid the slow and stressful court process.
There are also set procedures to follow before you go to court. These include steps such as mediation, dispute resolution and negotiation. Legal Aid NSW notes that you do not have to follow them in certain circumstances. Advice can tell you which ones apply to you.
Practical planning makes the whole process easier. These tips to get the most out of a separation cover some of the early steps. If property is a big part of your settlement, our guide on how to find a good property lawyer may help. Anyone also ending a marriage can read our tips for choosing the best divorce lawyer.
Frequently asked questions
Do I have to be divorced before dividing property?
No, you can apply for property settlement at any time after separation. Married couples then have 12 months from when the divorce takes effect. Starting early keeps your options open.
How long do de facto couples have?
Two years from the date of separation. This applies under the Family Law Act and under the Family Court Act 1997 in WA. After that, you need the court’s permission to apply.
Can I still apply if I am out of time?
Possibly, as the court can grant leave to apply late. This only happens in limited circumstances. Speak with a lawyer as soon as you can.
Does an informal agreement protect me?
Not fully. Without a formal written agreement, a further claim can still be made within the time limits. Consent orders or a binding financial agreement give more certainty.
This article is general information about Australian law and is not legal advice. Property laws and court processes differ between states and change over time. Speak with a qualified lawyer, a legal aid office or a community legal centre about your own situation.
