For separating couples, uncertainty generated by the COVID-19 pandemic brings additional anxiety around the questions of whether to commence, continue or delay property settlement in the event that assistance from the court is required for resolution.
Importantly, there is no ‘one size fits all’ approach to property settlement as each case presents its own unique set of circumstances. For some it will be prudent to wait, for others it may be essential to push on.
Things to consider
Time limitations apply to matters concerning property settlement, applications must be received by the court within two (2) years from the date of separation, or within twelve (12) months of a divorce order being issued.
If a limitation date is not imminent, considerations prior to commencing legal action should include the nature of the asset pool – for example, does it comprise a share portfolio, property, superannuation entitlements or business interests – and to what degree its components and valuations, have thus far been impacted by the COVID-19 pandemic, keeping in mind that this continues to be an evolving situation with uncertain outcomes ahead.
Couples who may be mid-way through a property settlement should seek legal advice before ratifying an agreement. If asset valuations are not current, the proposed division of assets may no longer reflect the intended outcome. Additionally, if individual assets have been impacted differently, one party may be disadvantaged.
Despite a reduction in the value of some shares, superannuation and property values resulting from the pandemic, a fair division of assets can still be obtained through use of percentage division as an alternative to agreeing to a base amount from the sale of an asset which may not yield the expected outcome due to the current level of uncertainty in the market.
A percentage split of sale proceeds between parties protects individuals from inequities which can result from agreeing to predetermined dollar values and distributes the burden of risk equally during times of economic uncertainty.
To protect public health and observe social distancing requirements, the hearing of non-urgent matters by the courts is being delayed which may affect the hearing of settlement matters.
Is dispute resolution a better alternative?
An alternative option outside the courtroom, is dispute resolution whereby negotiation and mediation may expedite the path to resolution, ideally saving time and reducing costs.
To protect public health, mediation can be conducted using telephone conferencing and online conference tools such as Zoom, avoiding the need to appear in court and any associated court delays that may be experienced as a result of social distancing.
When an agreement is reached through mediation, consent orders can be filed online with the court, finalising the property settlement matter.
If you would like legal advice as to the best way to approach your property settlement, reach out to our highly credentialled Family Law team for assistance on 5526 0157.