Partial Property Settlement in Family Law

Separating from a long-term partner is never an easy process, and matters become even more complex when it comes to dividing assets and financial resources. In many cases, couples find themselves in need of urgent financial relief, prompting the question: Can one receive a partial property settlement before the final orders are made?

The short answer is ‘yes’ – it is possible to receive a partial property settlement before final orders are made through:

• Negotiation,
• mediation, or
• by obtaining the court’s approval for interim consent orders.

This case study will shed some light on the concept of partial property settlements and explore the circumstances in which they are feasible and the factors that influence such decisions.

What is a Partial Property Settlement? 

A partial property settlement, also known as an interim property settlement, involves the distribution of assets or financial resources between separated parties before the final legal orders are determined. Partial property settlements can provide separated parties with some much-needed financial relief during the process of dividing assets and financial resources. 

The feasibility of a partial property settlement depends on various circumstances and factors. One such factor is the urgency of financial relief. In certain cases, individuals may find themselves in dire need of immediate funds to cover living expenses or other essential costs. A partial property settlement can help alleviate this financial pressure by providing an interim solution while the legal process unfolds.

Another influential factor in determining the feasibility of a partial property settlement is the complexity of asset division. 

To illustrate, let’s consider a hypothetical scenario involving Victor and Sarah, a couple who recently separated after 16 years of being together.

Case Scenario: Victor and Sarah

Victor and Sarah share a 4-bedroom home valued at $750,000, and each owns a motor vehicle. They also have savings and shares in their respective names. Victor earns $125,000 annually while Sarah, who works part-time, earns $55,000 per year. The couple has three children, aged 8, 12 and 16, and they now share custody of them equally. In the aftermath of their separation, Victor moves out of their shared home, leaving Sarah grappling with financial strain due to living expenses and legal costs.

Facing financial challenges, Sarah contemplates seeking a partial property settlement of $75,000, proposing that Victor sell some of his investments. However, the legal landscape surrounding partial property settlements is nuanced.

The Legal Landscape

Courts are generally cautious and reluctant to grant partial property settlements. This hesitation stems from the fact that such settlements occur before the evidence is thoroughly examined, and a final determination is made to ensure a just outcome. Nonetheless, there are circumstances, as outlined in the Family Law Act, where a court may entertain the idea of a partial property settlement if it deems it just and equitable, and the circumstances warrant such action.

Referencing the case of Wenz & Archer [2008] FMCAfam 1119, Federal Magistrate Riethmuller highlighted that a party with a compelling claim to a substantial share of the property should not be left in limbo while awaiting a final resolution. This is especially true when parties are asset-rich but possess relatively modest incomes.

Nardi Lawyers are here to help you to achieve a just and equitable property settlement. As leading family lawyers in Melbourne and surrounds, we will consider your circumstances and provide you with thorough and accurate advice as to your entitlements. 

Factors Influencing Partial Property Settlements

For Sarah to succeed in seeking a partial property settlement, she must establish several key factors:

1. Source of Funds: There must be a clear source of funds to enable the payment.
2. Financial Disparity: Victor should be in a position of relative financial strength and have control over the majority of assets.
3. Legal Expenses: Sarah must demonstrate her inability to fund her legal expenses, while Victor should have the capacity to cover his own.
4. Entitlement Preservation: The interim order sought should not exhaust or exceed Sarah’s entitlement, nor hinder Victor’s ability to recover any overpayment.
5. Reasonable Need: Sarah must provide a legitimate explanation for why the funds are required.
6. Just and Equitable: It must be established that making a partial property settlement order is fair in the given circumstances.

 When do I need a Family Lawyer for Property Settlement?

It’s important to keep time frames in mind and not to delay in seeking advice from a family lawyer. In the case of marriage, it is advisable to submit an application within 12 months from the date of divorce (there’s no need to wait for the finalisation of the divorce before initiating a property application). For those in a de facto relationship, it’s important to file an application within two years of separation. If these time limits are exceeded, obtaining the Court’s permission is necessary to apply for a property adjustment. Success in such cases requires the Court to be convinced that there are special circumstances warranting the application.

Seek the Expert Advice of Family Lawyers in Melbourne

If you find yourself in a situation akin to Sarah’s and are contemplating a partial property settlement, it is highly recommended to seek advice from specialist family lawyers. They can guide you through the legal intricacies, assess the viability of your case, and provide tailored advice based on your unique circumstances.

If you resonate with Sarah’s predicament and would like to explore the possibility of a partial property settlement, we invite you to contact the Nardi Lawyers office by calling 0491 626 283 or reach out by sending us a message. Our team of experienced family lawyers in Melbourne are here to help you navigate the complexities of partial property settlements. Together, we will work towards achieving a just and equitable resolution for your situation.