Timelines For A Property Settlement
Unlike filing for divorce, which requires a couple to wait 12 months, negotiations and agreements relating to parenting and financial matters are able to commence immediately from the date of separation.
In our work as family lawyers, each year we see a surge in requests to assist people who wish to finalise their property settlement in time for the end of the financial year. This is often because they have a desire to ensure that the financial separation piece arising from their separation can be finalised without having it roll over into the following financial year.
This is particularly the case for people who own businesses, as there may be an impact on the business valuations. If you have a family trust or a self-managed superannuation fund, rolling the settlement over into a new financial year may mean an additional year of having to do joint tax returns and financials.
Importantly, the value of your combined asset pool is determined at the time the agreement is formalised, not from the date of separation. That is, what your asset pool is valued at today, may change by your settlement date. This is particularly pertinent given the rising property market we are currently experiencing and market forces relating to businesses more generally that may ultimately impact upon a settlement.
This article explores what can hamper your ability to have your settlement wrapped up by June 30, along with three recommendations to improve your chances of being able to finalise your agreement sooner.
When A Pre-June 30 Property Settlement May Not Be Possible
We see that this deadline becomes more top-of-mind a few months out from June 30. While that may seem like sufficient time, in reality, it can be challenging, sometimes impossible, to achieve depending on where you are at in the process. There are a number of reasons why this timeframe may not be achievable.
This journey, however straightforward it may seem or however amicable you and your former partner are, can take time to work through and may reveal some speed bumps. It is not uncommon for us to see delays arise when previously agreed-to arrangements change, additional information needs to be sought, valuations are required or negotiations stall. All of these may have the potential to add time to this process.
How To Wrap Up Your Property Settlement By June 30
1. Identify Your Asset Pool Early
Compile the financials for your previous financial year along with updated information to December 31 or for the year-to-date (YTD) early.
Consider any assets that will need to be valued, such as property or businesses, and get the valuations underway. If you already have a valuation on your property, ensure it is current. If you have a business, it can take up to 2-3 months to have a joint business valuation completed, so make this a priority if it is required to advance a settlement.
You will also need financials for your superannuation balances and if you have a self-managed super, your family lawyer can advise you if further valuations of assets owned by the fund will be required.
2. Engage Your Accountant Early
If you have outstanding tax or financials for the previous financial year, engage your accountant to bring everything up to date. You will also need to seek year-to-date or adjusted financials which may assist with an indicative value to Dec 31. This information is likely required as it is used as a basis for negotiations and provides a more up to date picture than on 30 June the prior year. Requesting this information from your accountant now, before they start getting busy preparing for the end of financial year rush they will typically have, is wise.
Those returns or financials do not need to be lodged necessarily, however they must be in the draft, verified by the accountant and available to be disclosed and/or used as indicative figures.
3. Seek Advice And Commence Negotiations Early
Once you have commenced information gathering, seek out advice from a family lawyer about what information is likely to be required in your particular circumstances and also before you commence any negotiations. A specialist in family law can provide you with big picture advice to save you from many of the unforeseeable issues that can arise in property settlements.
Your negotiations may prove to be swift, but typically there are exchanges of offers, and it may involve going to a mediation, so you need to consider the time that this may take.
Then, once you and your former partner or spouse have come to an agreement, there is also time needed to formalise the documents and get them made by the Court. Finally, then you can implement the agreement, hopefully prior to the end of the financial year.
The key takeaway to keep in mind is that a property settlement takes time, regardless of how agreeable you and your former partner or spouse have been to date. If you wish to draw a line in the sand and have your settlement wrapped up by June 30, you do have a window of opportunity available to you. Begin the information gathering process, get your financials up to date, and seek specialist family law advice before acting, as early as possible.
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Phillips Family Law is an award winning Family Law practice serving clients across Australia and abroad. Regardless of where you or your clients are in the decision-making process, we help people become informed and aware of their options. To discuss your situation confidentially, phone +61730079898 or secure a time by clicking here.
Disclaimer: The content in this article provides general information however it does not substitute legal advice or opinion. Information is best used in conjunction with legal advice from an experienced member of our team.