Divorce vs Property Settlement: What’s the Difference?
When a relationship ends, people often use the words “divorce” and “property settlement” as though they mean the same thing. In family law, they are separate legal processes and understanding the difference can help you make informed decisions about your future.
What is divorce?
Divorce is the legal end of a marriage. It changes your marital status and formally recognises that the marriage has ended.
However, a divorce does not decide how your finances will be divided. It does not resolve property, debts, superannuation, financial resources or parenting arrangements.
What is a property settlement?
A property settlement is the process of dividing assets, liabilities and financial resources between separated parties. This can include the family home, savings, debts, investments, business interests and superannuation entitlements.
Property settlement is about resolving the financial ties between you and your former partner.
Property settlement matters are either finalised by consent through an Application for Consent Orders filed with the Court, or an application will need to be made to the Court is an agreement is not reached.
Do you need to be divorced before dividing property?
No. You do not need to wait until you are divorced to finalise a property settlement. In many cases, people resolve their property matters before applying for divorce.
It is important to be aware of time limits. Once a divorce becomes final, there is generally a 12-month time limit to commence property settlement proceedings if an agreement has not already been reached.
The key takeaway
Divorce ends the marriage legally. Property settlement resolves the financial separation. They are connected, but they are not the same thing.
If you have separated or are thinking about separation, getting early legal advice can help you understand your options, protect your position and avoid missing important deadlines.
TGB’s family law team can assist with divorce, property settlement and other issues that arise after separation. Contact us to find out where you stand.