A property settlement is the legal process by which assets are divided between parties following the end of a relationship. The goal of this settlement is a fair and lawful division of property among the involved persons.
In Queensland and nationwide, property settlements typically take place after a divorce, the end of a de facto relationship, a business separation, or an inheritance. Settlements would include houses or tangible properties, investments, debts, superannuation, and even family businesses.
Getting this division process right is crucial because the stakes are high. Not getting it done properly can lead to lengthy and often protracted legal battles, emotional stress, and, worse, economic losses.
Unfortunately, many property settlements still fail due to common problems that could have been easily avoided at the outset.
Let’s break down the top 5 common issues of property settlement, including what you could do to avoid them.
Confused about what you’re entitled to after separation? Let our experienced Queensland family lawyers guide you through your property settlement with clarity and confidence. Reach out to VM Family Law at 07 3447 8966 or visit vmfamilylaw.com.au to learn more.
1. Lack of Proper Documentation
One of the top issues in property settlements is failing to prepare the proper paperwork or documentation. This includes incomplete or missing documents.
Having the right documents is crucial in any division of assets or property process. A document serves as physical evidence of ownership, value, or agreement that helps prove a settlement case.
Without which, disputes or legal battles tend to arise.
For instance, you and a business partner verbally agreed three years ago on how to split the profit from a jointly owned investment property. Fast forward to settlement day: You and your partner have a different idea about the percentage of the split than what was initially agreed upon.
Without any written agreement to formalise it, everything is left hanging in the air. With competing versions of the conversation that took place years ago, trying to settle it with no actual proof can almost become futile.
What to do:
- Keep all ownership documents (titles, mortgage papers, trust deeds) up to date and easily accessible.
- Use written agreements and seek legal help to make them enforceable.
- Arrange current, formal valuations for any assets involved.
2. Disagreements Over Property Value
Disputes over the value of an asset can derail even the most amicable settlements. It often comes down to emotions, attachment, or lack of expertise.
A person might overvalue a family home due to sentimental reasons or undervalue a business asset to protect their interests.
In divorces or separations, one party may believe the property is worth more based on past appraisals or personal investment. In contrast, the other party holds a different opinion supported by recent market trends.
What to do:
- Hire an independent, qualified property valuer to assess the real market value.
- Avoid relying on online estimates or personal opinions.
- If you disagree with the valuation, request a second opinion or mediation.
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3. Hidden Debts and Financial Disclosure Issues
Full financial disclosure is essential in any property settlement case. A full disclosure would mean revealing all assets, debts, and liabilities to the other party involved in the settlement case, as well as to the court.
In fact, a full disclosure is a legal requirement governed by the Federal Circuit and Family Court of Australia (FCFCOA). Failure to comply can lead to penalties, breakdown in negotiations, cost orders and an adverse inference by the court.
Of course, non-full disclosure can occur unintentionally, as people may genuinely forget or fail to understand their obligations. Nevertheless, even accidental omissions can still result in the same above penalties or damage to your credibility in the court.
What to do:
- Provide full and honest disclosure of all your financials from the outset.
- Include superannuation, trust interests, crypto assets, and liabilities.
- Use a property settlement family lawyer to compile and review your disclosure documents.
4. Poor Legal Advice or Representation
Trying to handle a property settlement on your own or going with the cheapest legal option often backfires. Property law is complex, and a wrong move could cost you far more than a proper legal service would have.
Common mistakes made without proper legal support include:
- Misunderstanding your entitlements.
- Failing to document a settlement agreement properly.
- Missing key steps, like applying for court approval if needed.
A good family lawyer, such as VM Family Law, not only ensures your rights are protected but also helps reduce stress, resolve disputes, and speed up the process.
What to do:
- Choose a lawyer who specialises in family and property law.
- Avoid DIY kits unless your situation is very simple and amicable.
- Don’t delay getting legal advice. It’s worth the upfront cost.
5. Emotional Conflict and Poor Communication
Emotions often run high in a property settlement case, which can be very risky. This is particularly true during separations or family estate disputes.
However, when emotions take over, communication tends to break down, leading to stalled litigation or negotiations.
For example, one partner might feel betrayed or resentful and refuse to compromise, even when it’s in their best interest. In other cases, simple misunderstandings about asset division blow up into full-blown legal battles.
What to do:
- Stay focused on the end goal: a fair, legal settlement.
- Use professional mediators to facilitate productive conversations.
- Let your family lawyer handle sensitive communications to keep things calm and neutral.
Avoid costly mistakes in your property settlement. Our Queensland family lawyers at VM Family Law know exactly how to protect your assets and ensure fair outcomes. Call 07 3447 8966 or visit vmfamilylaw.com.au to get started.
Frequently Asked Questions (FAQs)
How long does a property settlement take in Australia?
It depends on the complexity of the assets and whether there’s agreement between parties. Simple cases may settle in weeks; complex ones can take months.
Do I need a family lawyer for a property settlement?
While not legally required, having a family lawyer ensures you understand your rights and avoid costly mistakes.
Can we agree on a property settlement without going to court?
Yes, many settlements are resolved through negotiation, mediation, or binding financial agreements without court intervention.
What if my ex-partner is hiding assets?
You can request financial disclosure through legal channels. If they still refuse, court orders can be enforced.
Is superannuation included in property settlements?
Yes. Superannuation is considered part of the asset pool and can be split between parties.
What happens if we can’t agree on a settlement?
If mediation fails, you may need to apply to the Family Court for a property order.
How are debts treated in a property settlement?
All debts, personal, joint, or business-related, are included and considered when dividing property.
Conclusion
Property settlements often go wrong due to avoidable issues, including poor documentation, value disputes, undisclosed debts, inadequate legal advice, and emotional conflict. However, the good news is that with the proper preparation and professional help, you can avoid the pitfalls and achieve a fair outcome.
Get your documents in order, disclose everything honestly, get assets professionally valued, and choose experienced legal support early. Most importantly, strive to maintain respectful and constructive communication.
Need help with a property settlement? Don’t go it alone. For trusted, straightforward advice that protects your future, contact VM Family Law today. We’re here to guide you every step of the way. Call us on 07 3447 8966 to get started.
