Financial Separation – Dividing Property & Finances From Spouse
Financial separation is a process of dividing property and finances from your spouse or partner. This can be done by mutual financial agreement, court order from the Family Court of Australia, or through uncontested divorce agreements. The goal of financial separation through a financial agreement is to protect yourself and your children from abuse, fraud, and other harmful situations that could arise if you were still married. If you are going through a contested divorce, it may not be possible for the two of you to agree on how to divide up your assets. In these cases, you must go before a judicial officer at the Family Court who will decide what happens with your financial assets.
Difference Between Separation And Divorce
In Australia, separation and divorce are two separate legal processes. While both end a relationship or marriage, separation is different from divorce in that it does not require a formal procedure. Separation is a way for couples to dissolve a marriage legally without going through a formal divorce process. The purpose of separation is to allow couples to live apart from each other until they decide to reconcile. On the other hand, if you want to get divorced, you need to submit a divorce application and go through a court hearing.
What is Financial Separation?
Financial separation is a legal term used to describe the division of joint assets between spouses during a divorce or other family law proceedings. It is typically considered after a couple has separated. Financial separation is essential to protect both parties from abusive or fraudulent situations. In case of contested divorce, a judge decides on the division of the asset pool.
There are pros and cons to financial separation. Some pros are that you can save money by not paying for your spouse’s credit card debt and not having to pay alimony or child support or child maintenance if you get divorced. Some cons are that if you are in an abusive relationship, you may be forced into a divorce, your spouse could still claim that he or she was financially responsible for raising your children, and it can be challenging to find good jobs when you are unemployed.
Pros And Cons of Financial Separation:
- You can save money by not paying for your spouse’s credit card debt
- You do not have to pay alimony or child support if you get divorced
- You can maintain your own credit rating and avoid financial ruin if your partner is in financial trouble
- You have the ability to manage your own finances and make financial decisions independently
- You can avoid the possibility of inheriting your partner’s debt
- If you are in an abusive relationship, you may be forced into a divorce
- Your spouse could still claim that he or she was financially responsible for raising your children
- It can be challenging to find good jobs when you are unemployed
- You may have to pay more taxes if you are not married
Update Your Accounts, Will, and Super
When getting a financial separation, three things need immediate attention: updating your accounts, updating your will, and updating your superannuation fund.
When getting a financial separation, three things need immediate attention: updating your accounts, updating your will, and updating your superannuation fund. Check your bank account statements to ensure that you haven’t been charged any fees while you’ve been separated, and contact the bank to reverse these charges if necessary.
It’s also essential to keep track of your investment portfolio, sell some investments or transfer them into your new name if you move from one home to another. Additionally, update your insurance policies, including life, car, and health insurance.
Divide Your Property And Assets
Valuation is the process of determining the value of something. When dividing property and assets, it’s best to use an independent accountant or lawyer. It’s crucial to consider everything you own, including your home, cars, furniture, appliances, jewellery, investments, retirement accounts, bank accounts, business interests, and liabilities such as mortgages, student loans, credit card debt, car payments, medical bills, etc.
What If You Agree on How to Divide Property And Assets?
There are two types of agreements that can be made in financial separation: Informal Financial Separation Agreement (IFSA) and Legal Financial Separation Agreement. An IFSA is a contract between two parties who wish to separate their finances without going through a formal legal proceeding. On the other hand, a Legal Financial Separation Agreement is legally binding and requires a lawyer’s assistance. It’s crucial to seek legal advice to avoid making mistakes that may cause problems in the future.
Financial separation is a crucial process that requires attention to detail and legal advice. Protecting yourself and your assets should be the top priority when going through a financial separation. With proper preparation, you can ensure that you are not left with a financial burden after a separation or divorce.
Informal Financial Separation Agreement:
If you agree on how to divide property and assets, it can make the separation process much smoother and quicker. An informal agreement can be made between the two parties without the need for legal proceedings. This is known as an informal financial separation agreement (IFSA). This type of agreement allows both parties to retain control over their assets without the need to go to court.
An informal financial separation agreement (IFSA) is a contract between two parties who wish to separate their finances from each other. The IFSA allows both parties to retain control over their assets without going through a formal legal proceeding. A lawyer usually drafts an IFSA, but it does not require a lawyer. If you are considering filing for a divorce, then you should consider using an IFSA instead of going through a court case.
Legal Financial Separation Agreement:
A legal financial separation agreement is a formal contract that divides the property and assets of a married couple who have decided to separate. Unlike an IFSA, a legal financial separation agreement is legally binding and enforceable by a court of law.
It’s important to consult with a family law expert before signing a legal financial separation agreement. This is because once you’ve signed the agreement, it’s difficult to undo or modify the terms without the consent of both parties or a court order.
In some cases, parties may agree to a financial separation agreement without fully understanding the legal implications of the terms. For example, if one party agrees to pay child support, they may assume that they are agreeing to pay it forever. However, if circumstances change and the parties reconcile or the children reach a certain age, the child support obligation may end or be modified. It’s important to work with an experienced family law attorney who can advise you on the legal implications of the agreement and ensure that your rights and interests are protected.
What If I Disagree About How To Divide Property And Assets?
Disagreements over the division of property and assets can be a challenging issue to resolve, and it’s not uncommon for ex-partners to be unable to reach a mutual agreement. In this case, there are several options available to resolve the dispute. Couples can try mediation, where a neutral third party helps facilitate communication and negotiations between the parties. Another option is to seek the assistance of a collaborative lawyer who can work with both parties to find a solution. If these options do not work, the case may have to be taken to court, where a judge will decide on the division of assets. It’s essential to seek legal advice when faced with this situation to ensure that you understand your rights and obligations under the law.
What You Can Expect From O’Loan Family Law Regarding Financial Separation Australia
If you’ve decided that the best thing to do for your wellbeing and that of your children is to file for a divorce, we assist in providing advice so that the financial separation from your spouse is as quick and cost-effective as possible. These are some of the services we offer:
- Financial separation advice. If you’re looking to formalise your separation or are having trouble reaching an agreement, we help expedite the process so that you can save time and money. Our consultations include giving guidance regarding the practicalities of your relationship breakdown such as property and financial division, maintenance, parenting and child support. We’ll help you formulate proposals, assist in responding to them and negotiate on your behalf. If needed, we can refer you to counsellors, mediators, valuers and other experts.
- DIY separation service. Although not all cases are straightforward, this option is ideal in instances where both parties have decided that they want a separation and have agreed on the terms. Where the application for divorce is joint, we assist in its preparation, issue the paperwork to you and spouse for signing, file the application in the Federal Circuit and Family Court of Australia and send you a copy of the divorce order when received from the court.
- If, on the other hand, you require a sole divorce application, we include the service of issuing the application to your spouse and attending the court hearing if required. Depending on your situation, you may also need our DIY option for an application for consent orders regarding property and parenting agreements where we collect the necessary information, prepare the draft application, and commit to minor changes where required. Following these steps is where you and your former partner sign the application, court filing, and you obtain a copy of a court order.
- The last of the ‘Do It Yourself’ choices is the processing of your binding financial agreement (‘BFA’). We can advise you as to whether a BFA is more suitable for you in your particular circumstances. After preparing the draft BFA, we allow for minor changes, serve a copy of the draft to your former partner (or their lawyer), offer advice on relevant laws and arrange for signing by both parties. In conclusion to these steps, it’s a requirement that the BFA is signed to confirm that we have given you advice. This is also the case for your former partner.
- Clear steps. We offer a process where you know what to expect from the outset and communicate the legalities involved in a way that’s easy to understand.
The first phase of our separation services is to conduct a conflict check to ensure that haven’t previously advised your former partner. Following this step is a complementary 15-minute introductory call where we introduce ourselves to you and establish your current situation and what the desired result is. The next phase is the initial consultation, where we go into the details of your case to determine the best way forward regarding property issues and parenting. We then offer advice on how to resolve matters and tailor make a strategy suited to your circumstances.
Throughout your separation journey, we keep you informed of the progress of your case and offer support. The last step is resolution, where ideally, we seek to settle without going to court.
Get Legal Financial Separation Advice From O’Loan Family Law
We are a law firm with a team of experienced legal practitioners who specialise in family law matters. Our firm provides legal services for individuals seeking financial separation from their spouses or partners who need professional advice regarding your family law matter.
Why Trust O’Loan Family Law
Our firm has the approval of the professional standards legislation, and our team are members of the scheme. Owner Bron O’Loan is a #1 Amazon bestseller book publisher of ‘The Splits’, a book that can help parents going through a divorce to support their children through the process. Our team of experienced family lawyers who can provide you with professional advice regarding your financial circumstances.
Contact us for accessible and innovative service in Sydney North, CBD and Eastern Suburbs.