If you are in the process of getting a divorce but want to purchase property, you may wonder whether your soon-to-be-ex partner is able to lay claim on it. But what are the options you can explore when you’re separating from your spouse and looking for a new place to live?
In a buyer’s market, you may be reluctant to wait until the property settlement process is complete before you purchase the property. Before you take the plunge, though, make sure you consider the following:
Divorce and Property Settlement: Two Separate Processes
When it comes to divorce, it’s difficult to have it all. There will be many difficult conversations and plenty of compromises, and you may have to give up some things to get others. The first thing you need to do is to make sure you are all on the same page.
Most of the time, separating partners consider purchasing property before they finalise their family law property settlement. This is because they assume that any assets purchased after the legal ending of a marriage are not involved in the property settlement pool. However, this is not the case—assets acquired both before and after separation can be included in the pool because divorce and property settlement are two separate legal processes.
Purchasing Property Prior to Finalising the Property Settlement Process
Can one purchase property prior to property settlement? This is possible, of course. However, you should consider whether it is the most beneficial course of action depending on your circumstances. Keep in mind that if you have not yet finalised property settlement and you decide to buy property, there is a strong possibility that your property will be added to the family law property pool that is to be divided between you and your former spouse.
Here are a few frequently asked questions about property purchases and settlement after divorce:
1. Why is newly purchased property considered a part of the property pool even after divorce?
The Family Law Act is grounded in the fundamental principle that all properties of both parties are included in the family law property pool which is available for division, regardless of when it was acquired (gifted/inherited/purchased) and who the legal owner is or who holds the property title.
2. Will my ex-spouse be able to claim part of the property I bought after our divorce?
This is the million-dollar question that people ask when divorcing. However, the answer is just because your newly bought property (or any property for that matter) is included in the property pool doesn’t mean they (the other party) can just transfer the property under their names or sell them or even divide them.
It just means that the property within the property pool will undergo a process of determining which properties, assets, superannuation and liabilities will go to each party through the family property settlement.
3. Should I just wait for the property settlement process to be finalised?
If you feel like you have more to gain by going ahead with the purchase and you believe your soon-to-be-former spouse will remain civil throughout the process, then the decision is in your hands. Keep in mind, however, that doing so increases the risk of complexities in your property settlement proceedings.
It is always great to find yourself a place where you can call your own. Even if you’ve found the perfect property to purchase, however, prevent your dream from becoming a nightmare by consulting a family lawyer that can guide you through the process and protect the property you purchase.
Springfield Legals is a law firm that specialises in Family Law, Income Protection, Succession Planning, and Property and Business Conveyancing. Contact us today if you have any questions or you want to know more about property settlement.