Five Myths of Divorce and Separation.

We often hear that individuals know what to expect because a friend, a colleague or a family member went through a separation. More often than not, the advice they have been given is incorrect or misleading. Here, the major focus is on five myths of divorce and separation.

Every family law matter is different, and it is important that people facing such a situation seek specialist advice to enable them to make informed decisions in the future. Separation is confusing enough as it is without incorrect and misleading information from others.

MYTH #1 – All relationships end in a 50/50 property division


There is no universal equation that is applied in a property division. Property can be divided according to a number of factors. These include:Family Law Property settlement

  • The length of the relationship
  • The financial (direct or indirect) contributions of both parties
  • The non-financial contributions of both parties – homemaker and carer roles
  • The current and future needs of both parties – age and health of each individual

Because there are so many different factors to consider, the reality is that a 50/50 property division is actually rare.

MYTH #2 – You have to be divorced to do a property settlement


You do not have to be divorced to do a property settlement. However, there are time limits depending on whether the settlement is for a de facto relationship or a marriage.

Time Limits:

  • Marriage: 12 months from the date the divorce order takes effect
  • Defacto: 2 years from the date of separation

Once a divorce order is made, there is a 12-month time limit for you to commence proceedings for a property settlement. The 12-month time limit starts from the date the divorce order comes into effect.

In the case of de facto couples, the time limit to commence property proceedings is two years from the date of separation.

If you do not commence proceedings within these time frames, you will need to seek permission from the court to commence proceedings. It is the Court’s discretion as to whether they grant permission or not and they will only do so in limited circumstances.

MYTH #3 – Assets within companies, trusts and superannuation funds are excluded from a property settlement


The definition of property in Family Law is wide. The important word is control.

The property includes all assets that the parties have a legal or equitable interest in, whether in their sole name, joint names or with a third party.

Superannuation comes into this definition and can be split so that some of it is given to the other spouse.

The issue of whether trust and/or companies are included in that definition can be quite a technical area. It is wrong for people to think it is possible or even easy for a party to hide assets by registering in the name of the company or a trust. Just because it is not in your name does not mean it does not form part of the asset pool available for division.

The issue comes down to whether a party has control of the assets. An indicator of control is whether a party can decide what happens to those assets or whether they can appoint or remove trustee/s and beneficiaries.

MYTH #4 – All family disputes involving lawyers go to court  

Binding AgreementTHE REALITY

  • If settlement or agreement is the primary goal, then this can be established without the need to go to court as long as both parties can come to an agreement
  • The court should be seen as a last resort

Where possible, resolution through mediation or by negotiations with the other party should be made, thereby saving both parties in legal fees and time and allowing each to move on with their lives.  However, sometimes where further negotiations or mediation will not advance the matter in any substantial way, commencing court proceedings will be necessary to come to a resolution of the matter.

MYTH #5 – If you have agreed on a property division, you must involve lawyers


There are ways to formalise an agreement that doesn’t necessarily involve lawyers. It is possible to do this with either of the following:

  1. Consent Orders
  2. Binding Financial Agreement

Consent Order means that the court has considered and formalised the agreement. Consent Orders can be done without lawyers.  However, we would strongly urge you to have a lawyer specialising in family law check over the documents to make sure they have been drafted correctly. This is particularly important in relation to transfer of property otherwise you risk incurring stamp duty and/or losing other advantages of formalising the agreement.

A Binding Financial Agreement effectively is a contract between the two estranged spouses. For this sort of agreement, you must involve lawyers for it to be enforceable. Independent legal advice must be obtained by each party and the lawyer must sign off on the agreement otherwise, to put it frankly, it is not worth the paper it is written on.

If you are going through a divorce or separation, and need help with any of the above, please contact Cornerstone Law Offices by on phone: 1300 267 637 or by email at info@cornerstonelawoffices.com.au

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