Property Settlement Mediation: Separation & Divorce

In the event of divorce, it can often result in a traumatic situation for all family members involved. Hence, it is crucial to be able to sort through any legal matters respectfully, with a neutral third party, often a mediator. Hence, many people opt for property settlement mediation.

In Australian family law, separated or divorced couples can leverage family law mediation to peacefully divide their property and resolve any and all existing financial issues. It creates a safe environment between the parties involved, with legal guidance and advice in all relevant matters. Often, it’s a cost and time-effective process of avoiding court proceedings and legal complications while saving a lot of stress and conflict.

This form of mediation is family law mediation or divorce mediation.

Property Settlement Mediation in Family Law

In family law, the term “property” exists in broader terms. It essentially includes any and all assets of the relationship, including but not limited to real estate, joint bank accounts, and superannuation. In many cases, it may also include debts such as personal loans, mortgages, and credit card debts.

However, there may be property or assets that a person acquired before the relationship or after separation. In some circumstances, these assets will also be included in the property pool.

Parties who have separated are eligible to participate in a property settlement mediation. Although, before formally applying to Court, you and your former partner must try to make a genuine effort to resolve your property issues among yourselves. A simpler way to do that is through family law mediation.

Involved parties can reach out for mediation any time after separating, but we recommend doing it as soon as possible to avoid any future legal complications. Moreover, if you need to apply to Court for a property order, there will be time limitations for the process.

Married couples who have divorced must file the application within 12 months of the divorce order. In most cases, the sooner you file your application, the better the picture of your financial citation. Additionally, settling property issues can remove a significant element of stress from other parties, which may include divorce applications and parenting arrangements.

The Family Law Mediation Process & Outcomes

Mediation is typically an informal process. The parties meet with a mediator who offers neutral involvement and legal guidance. Moreover, the mediator is an independent person with specific training in conducting such kinds of mediation and negotiating favourable outcomes. They will have no interest in either party achieving a particular result.

Additionally, the parties may or may not meet with the mediator together. Many stages of the mediation may require an individual meeting of either party with the mediator. In either case, they may agree or disagree with having their lawyers present at the mediation. While other support people can attend – such as family members – most mediators believe it’s a good idea only for the involved parties to attend.

In the case that you opt for legal representation, you will need our legal advice before you move on to family law mediation and again before you make a final agreement. It ensures that you are entirely aware of all legal risks involved and that the agreement serves your long-term best interests.

In most cases, unless there are serious circumstances, all discussions at a family law mediation will remain confidential. Hence, if there is no agreement at mediation and matters lead to Court, both parties can’t use the discussions at the mediation. It essentially allows individuals to explore their settlement options freely.

Preparing for a Property Settlement Mediation

Understandably, property discussions can be stressful, especially in the wake of a relationship breakdown. However, many clients achieve excellent outcomes in property settlement mediations, and it’s certainly an easier and legally safer process compared to in-house discussions without mediators, which can raise multiple conflicts and disagreements,

Hence, there are a few things you can do to prepare yourself for your property settlement mediation. First and foremost, create a master list of your property, including any and all personal items. You must ensure that the list is detailed, including the owner of each item and whether you’d like to retain it.

The next step would be receiving and recording valuations from licensed real estate agents for any real estate you own. It’s crucial that you estimate the value of all your assets, including real estate, cars, investments, and jewellery. Additionally, try and work out the individual contributions to the property pool which you made at the beginning of your marriage.

Furthermore, working out a budget for future living expenses and financial needs, especially if there are children involved. While every case is unique, it is crucial to reach an agreement for as much property as possible.

Some parties decide to reach an informal agreement without anything in writing. However, that is not advisable because, in the absence of a formal written agreement, either party can make a further claim on your property in the future.

Will the agreement be enforceable?

property settlement mediation

On its own, an agreement at the end of mediation will not be enforceable. However, it serves as evidence of your mutual agreement after one or multiple sessions of mediation. Hence, if one party breaches the agreement, you will have the option to sue them for breach of contract under general law.

However, in many cases, you can also use consent orders or even decide to enter into a Binding Financial Agreement (BFA). Usually, we recommend applying to Court for the BFA or consent orders depending on the mediation agreement. In such cases, if one party breaches the agreement, you can apply to Court for enforcement under Australian family law.

When parties put their agreement in writing as a BFA, they obtain independent legal advice from lawyers who sign the statement. However, they will not file a BFA in Court. On the contrary, you can apply to the Court for orders by agreement, specifically consent orders. They will be final and binding.

The Court will only make an order it is equitable to alter the existing property interests. However, it can be a complicated and tedious process. The Court will have to identify the legal and equitable interests of both parties and determine whether it is just to make a property settlement order. The next step will be to determine a percentage-based entitlement of all financial and other contributions. Moreover, the Court will also determine the future financial needs of the parties to consider any further adjustment to the percentage. Such financial needs may include earning capacity, age, medical records, financial support for children, additional responsibilities, etc.

Disagreement at Property Settlement Mediation

It’s not important that separated or divorced couples always agree to all the statements and agreements in mediation. Hence, if you and your former partner can’t agree on the division of property, the Family Dispute Resolution (FDR) practitioner or mediator may recommend further counselling or application in Court.

However, the mediator will present the option of Court only as a last resort when there seems to be no chance of agreement. In such cases, the Court will give you a hearing date, where you will need to provide evidence about your financial situation and any other relevant factors. Such pieces of evidence can include documents, expert reports, or even witness evidence. These types of hearing are called trials.

The Court will then make a decision. It is important to note that this decision will be legally binding on both parties regardless of how you feel about it. Moreover, it will also be expensive and take months or even years before reaching a final decision. Hence, it escalates to stress and creates legal complications for the involved family members. It’s a significant reason why we encourage our clients to resolve things for themselves or through mediation. It’s a much faster, affordable, and legally better option for the involved parties.

Talk to a United Legal Lawyer today

Legal advice is crucial for anyone involved in family law property negotiations. It’s mostly because, in such cases, you must be aware of any hidden or long-term effects of the agreement you reach to. Moreover, it ensures a faster and more respectful way to ensure the best possible outcome to secure your future.

It is important to note that while you can have a legal representative present at a mediation, they can’t decide the final agreement for you, like in cases in Court. Instead, they can legally represent you and evaluate your position to offer relevant legal advice.

In either case, it is important to involve a third party with the necessary skills and experience to help you sort out legal complications without any unnecessary conflict. Whether it’s the start of mediation or it leads to Court, you must be aware of your legal options and risks at all times.

In a situation like this, we understand that it may be emotionally and financially traumatic to settle everything, especially if there are other family members involved. Hence, our team of experienced lawyers takes over the legal burden and offers you a safe space to communicate your requirements and divide your assets fairly. Contact one of our lawyers for a detailed consultation today.