Mediation for Property Settlements
What is family mediation in property settlements?
In Australian family law, separated or divorced couples can use mediation to divide their property and to resolve all financial issues between them. It’s often a cost and time-effective way of avoiding court proceedings, with less stress and conflict.
This type of mediation is sometimes known as family law mediation or divorce mediation.
What is property in family law?
Property is defined broadly in family law. It includes any assets of the relationship, including real estate, bank accounts and superannuation. It also includes any debts, such as credit card debt, personal loans and mortgages.
In some circumstances, property acquired before the relationship, or after separation is also included in the property pool.
Who can participate in a property settlement mediation?
Parties who are separated can participate in a property settlement mediation, regardless of whether they are married or de facto, same-sex or opposite-sex.
Before applying to a court for a property settlement, you and your former partner must make a genuine effort to resolve your property issues. This can be done through family mediation.
Parties can mediate any time after separating, but we recommend attempting it as soon as possible because:
- If it’s necessary to apply to court for a property order, there are time limits for doing so:
- For married couples who have divorced, the application must be made within 12 months following a divorce order
- For de facto couples who have lived together for at least two years, or who have had at least one child together, the application must be made within 24 months after separating
- Usually, the sooner the process is underway, the better the picture of the parties’ financial situation.
- Settling property issues tends to remove a significant element of stress from any other matters, for example, divorce applications and parenting arrangements.
If you’re about to separate or have already separated, contact us for legal advice. We’ll guide you through and make your best interests our top priority.
What is a mediation?
A mediation is an informal process. Usually, the parties meet with a mediator who is an independent person with specific training in conducting mediations and negotiating outcomes. The mediator has no interest in one party achieving a particular result. The mediator’s role is to help the parties agree.
The parties may meet with the mediator together. At other stages of the mediation, they may meet with the mediator separately. The parties may agree to have their lawyers at the mediation, or they may agree not to. They may also agree to allow other support people to attend, for example, family members.
If you choose to go without legal representation, you’ll need our legal advice before the mediation, and again before you make an agreement. This may ensure that you’re aware of any risks, and that the agreement caters for your long-term best interests.
Usually, anything discussed at a family mediation is confidential and can’t be used in court (if there’s no agreement at mediation). This aims to encourage the parties to explore their settlement options.
How is family mediation different from family dispute resolution?
Family mediation is a form of family dispute resolution.
Both mediation and family dispute resolution (FDR) are broad terms. Both can assist parties to sort out arrangements for property, maintenance and parenting issues.
Facilitators are known as mediators (for mediations) and FDR practitioners (for FDR). While mediators may work in many different legal areas, FDR practitioners are specially accredited in family law, which means that they often have specific experience in dealing with issues such as property division and parenting.
Whether you choose mediation or FDR, there is usually a fee. We’ll discuss that with you, and also work out how to divide the cost between you and your former partner.
What can I do to prepare for a property settlement mediation?
We understand that any property discussions can be stressful, particularly in the wake of a relationship breakdown. But after helping many clients achieve excellent outcomes in property settlement mediations, we know there are some things that you can do to help the process, including:
- Creating a master list of all your property (including any personal items). Detail who holds each item and whether you’d like to have or retain it
- Get valuations from licensed real estate agents for any real estate. Record the values on the list
- Estimate the value of any other assets, for example, cars, jewellery and investments. If possible, agree on their worth. Record these values on your list
- Try to work out what each of you contributed to the property pool at the beginning of your marriage or cohabitation
- Work out a budget for your future living expenses and financial needs. (For children’s needs, see our page on Child Support)
- Try to focus on reaching agreement for as much property as possible. The less there is for a court to sort out, the more efficient the process
- Speak to us about drafting a basic agreement before the mediation. This may speed up the process and reduce your legal costs
Is the agreement enforceable?
On its own, an agreement reached at mediation isn’t enforceable. It does, however, serve as evidence of what you’ve agreed. If one party breaches the agreement, your only option may be to sue for breach of contract under general law.
However, you can use consent orders or choose to enter into a Binding Financial Agreement (BFA).
We usually recommend applying to court to make consent orders based on the mediation agreement, or the BFA. If one party breaches the agreement, you can apply to court for enforcement under Australian family law.
What happens if we can’t agree how to divide the property?
If you and your former partner can’t agree on the division of property, the FDR practitioner or mediator may recommend further counselling or another attempt at mediation.
If there’s no chance of agreement, you may need to apply to court for orders about property division. The court will give you a hearing date and on that date, will consider evidence about your financial situation, living situation and anything else that’s relevant. Evidence can include documents, witness evidence or expert reports. This type of hearing is like a trial.
The court then makes a decision, which will be legally binding on both you and your former partner, regardless of how you feel about it.
This process is often expensive and can take many months or even years to finalise. It can also escalate stress. That’s why the system encourages people to resolve things for themselves.
We’ll give you advice about your options for property settlement. Get in touch to find out more.
Should I get legal advice?
Legal advice is essential for anyone involved in family law property negotiations. You need to know about any hidden or long-term effects of the agreement that’s proposed. And you need to get the best possible outcome to secure your future. Give us a call for further information.
Are there any other issues to consider?
Your property settlement may affect any Centrelink payments. You’ll need to advise Centrelink as soon as possible to avoid incurring any debt. You should also consider making a new will. Any significant change in circumstances can trigger the need for a new will. Contact one of our specialist estate planning lawyers to find out more.