The end of a relationship itself is often a challenging time, which is why in many cases and for a variety of reasons, couples who have separated may let some time pass before they take steps to finalise their property settlement.
Identifying the “property pool” available for distribution between a separating couple is an important and sometimes complex step in a property settlement. If you and your spouse or de facto partner cannot agree as to what assets are matrimonial or relationship, the court will have to decide this.
If some time has passed since separation occurred, one of the most commonly arising questions is “what date do we use to determine the assets and value of the property pool”? This can cause some tension and be either a cause of concern or an unexpected bonus, depending on the circumstances.
The usual approach by the court in this regard is to value the property pool as at the date of trial and not as at the time of separation.
By the time of trial, which depending on circumstances maybe 18 – 24 months after proceedings have been commenced, it is not uncommon for the value of assets to rise or fall, sometimes significantly.
While the Court will consider the changes carefully and, if appropriate, attribute such changes as being a contribution, positive or negative by a party (which may increase or decrease their overall entitlement), the value of the asset will be taken as at the date of the trial.
This approach does not mean a party can “sell or otherwise dispose” of an asset prior to settlement. If a party wrongly disposes of an asset following separation, the court will carefully consider the factual circumstances and may decide to notionally “add back” the asset and its value, treating that asset as part of the property pool and will be taken by the person who dealt with it as part of their share. This is a complex area of law and cases surrounding it are developing the law regularly.
Aside from implications from a change in your property pool assets following separation, prior to property settlement, it is important to be aware of the limitations. If you were married, applications for property orders must be made within 12 months of your divorce becoming final. If you were in a de facto relationship, your applications for property orders must be made within 2 years of the breakdown of your de facto relationship.