You and your former spouse or defacto have separated, possibly resolved children’s matters and come to an agreement to divide your joint property.
You may even have had the assistance of a Mediator, written your agreement down, and implemented it.
You may have even re-partnered and purchased another home and generally moved on.
What you may not have done is to have your property agreement formalised.
If you have not formalised your property agreement then months or even years down the track, you may receive the shock of your life when you are served with your former spouses application for a property adjustment.
Are you safe? Well the short answer is no.
Irrespective of time limits that apply to the automatic right to commence property proceedings, the Family Law Act allows proceedings to be commenced out of time in some circumstances, sometimes decades later. If the Court is satisfied that the hardship that can be caused to one party or to a child of the relationship outweighs the hardship caused to the other party if the Court does not grant permission to allow proceedings to be commenced out of time.
Further, if you commence proceedings in relation to children or other non-property related matters at a later time, your former spouse can join property proceedings to that application in their response, without having to go through the normal process of applying to commence proceedings out of time.
Depending on the individual circumstances, this can occur even years later and in some cases that have come before the Court have been as much as decades later.
Further, there are also potential tax benefits in formalising your agreement, eg when transferring the former family home or investment property there is no stamp duty payable if it is done in accordance with a Court Order, there are concessions in relation to CGT for investment properties and for those who are in private business. There are also
potentially very significant tax considerations such as CGT and when assets are transferred out of a family company or if dividends are paid as part of a Family Law settlement.
So even if you are someone with only your home to divide or your assets are more extensive, there are very important reasons and benefits in formalising your property settlements.
The fact that you have done so informally may not save you from a claim arising from your distant past.