Top 6 Myths about Separating

One of the most common and persistent separation myths in Australia is the belief that separating couples automatically receive an equal 50/50 split of their assets. While this assumption is widespread, it is important to understand that the law does not guarantee a strict half-and-half division of property. In fact, courts in Australia use a detailed four-step process to determine what each party is entitled to upon separation.

First, the court identifies and values all assets and liabilities that form part of the property pool. Second, the court examines both the financial and non-financial contributions each person has made to the relationship over time. Third, the court assesses whether either party requires additional financial support moving forward, such as due to health or caregiving responsibilities.

Finally, the court considers whether the proposed division is fair and equitable in the circumstances. As a result, the division of assets following separation can be significantly more or less than 50% for either party, depending on these factors. Understanding this dispels one of the biggest separation myths in Australia and helps people approach asset division more realistically.

Another common misconception among separating couples is the belief that if an asset or property isn’t registered in their name, they have no legal claim or interest in it. This is one of the key separation myths in Australia that often leads to confusion and unfair expectations. The reality is that all assets and liabilities acquired during the relationship, regardless of whose name they are in, are considered part of the overall property pool.

This means that even if an asset is solely in one partner’s name, the other partner may still have a legal interest in that asset when the property settlement process begins. The law recognises that relationships often involve shared contributions, both financial and non-financial, that justify claims to property regardless of title.

A serious separation myths in Australia is the belief that one can withhold information about certain assets from their former partner during property settlement negotiations. However, the law mandates full and frank disclosure from both parties. This means each person must reveal all assets they own, even those previously unknown to the other partner to ensure any agreement reached is legally binding and enforceable. Failure to disclose assets can lead to the Consent Order or agreement being overturned by the court and reopened at a later date.

Moreover, courts may order costs against the party who intentionally concealed assets. Therefore, transparency is essential to avoid future legal complications.

Many people mistakenly believe that property settlement after separation only involves dividing the family home. This is a common and damaging separation myths in Australia. In reality, all assets and liabilities owned by the couple must be taken into account when dividing property. This includes houses, cars, boats, furniture, savings accounts, shares, and superannuation funds, as well as liabilities like mortgages, credit card debts, car loans, personal loans, and tax debts. The law requires a comprehensive assessment of all these assets and liabilities to ensure that the division of property is just and equitable.

Focusing solely on the house ignores the broader financial picture and can result in unfair outcomes.

Another dangerous separation myth in Australia is the assumption that informal agreements made between partners without legal oversight are binding and final. Unfortunately, any agreement that does not comply with the Family Law Act’s legal requirements is not enforceable, regardless of whether it was signed or witnessed. Such “gentleman’s agreements” carry the risk that one party may later seek additional property settlement money, as there is no formal legal recourse to prevent this.

To ensure that property settlements are binding and protect both parties, formal consent orders or Binding Financial Agreements must be drafted in accordance with the law.

While there is nothing in the law that prevents a person from transferring the names on the title deed of a property between persons, it does not prevent a person coming back at a later date to seek property settlement pursuant to the Family Law Act. Importantly, if a property is transferred to a person without being pursuant to a Family Law Binding Financial Agreement (BFA) or Consent Order, the transfer will incur hefty stamp duty fees. If the transfer occurs pursuant to a BFA or Consent Order then the transfer will not incur any stamp duty fees.

A frequently misunderstood aspect of separation law and one of the more costly separation myths in Australia is the belief that simply transferring the title of a property between partners is enough to finalise a property settlement. On the surface, this might seem like a straightforward solution: one person agrees to give up their share in the home, and the title is changed accordingly. However, this approach ignores several key legal requirements and leaves both parties exposed to future claims.

In Australia, transferring a property title between separating partners does not automatically conclude the financial relationship between them under the Family Law Act. Even after such a transfer, either party may still bring a claim for property settlement at a later date, sometimes even years later, unless a formal legal agreement is in place. This can lead to further disputes, additional legal fees, and emotional distress that could have been avoided with proper legal steps.

More importantly, property transfers conducted outside the framework of a Binding Financial Agreement (BFA) or a Family Court Consent Order are subject to stamp duty, which can be substantial depending on the property’s value. By contrast, when the transfer is completed pursuant to a BFA or Consent Order, the transaction is exempt from stamp duty, saving both parties thousands of dollars. This exemption is one of the most significant financial advantages of going through the formal legal process.

This myth also overlooks the fact that formalising the property settlement through legal channels offers certainty and closure. A well-drafted BFA or Consent Order not only clarifies what each party receives but also prevents either side from making future financial claims. Without this protection, assets you accumulate after separation such as a new home, savings, or business income may still be vulnerable to division if your former partner chooses to pursue legal action later.

Dispelling these types of separation myths in Australia is crucial for couples who want to protect their financial futures and move forward with confidence. Engaging a qualified family lawyer to draft and finalise a legally binding agreement ensures the property settlement is recognised by law, enforces the intended outcome, and prevents unnecessary financial and emotional consequences down the line.