Top Mistakes to Avoid in Property Settlements

The most common mistakes include delaying the process, failing to disclose financial information, assuming a 50/50 split is guaranteed, overlooking superannuation, letting emotions influence decisions, handling settlements without legal advice, not formalising agreements, ignoring tax implications, inaccurately valuing assets, and choosing the wrong legal representation. 

Property settlement is a critical component of any relationship breakdown, particularly for de facto and married couples in Queensland.

When handled incorrectly, property settlements can lead to prolonged disputes, emotional distress, and significant financial loss.

To help you navigate this complex area of family law, we have outlined the top mistakes to avoid in property settlements, along with practical strategies to ensure a just and equitable outcome. 

1. Delaying the Process 

One of the most common and costly mistakes is waiting too long to initiate the property settlement process. In Queensland, strict time limits apply: 

• For married couples, you must apply for property settlement within 12 months of your divorce becoming final. 

• For de facto couples, the limit is 2 years from the date of separation. 

Failing to act within these timeframes may result in you losing the right to a property settlement altogether, unless you obtain special leave from the Court. Prompt action ensures you can gather the necessary financial information and secure your entitlements without added legal complications. 

2. Overlooking Full Financial Disclosure 

In any property settlement, both parties have a legal obligation to provide full and frank financial disclosure. This includes all assets, liabilities, superannuation, income, and financial resources. Omitting or hiding information can have severe consequences, including court penalties and an unfavourable judgment. 

Disclose everything honestly and completely. If your ex-partner fails to disclose relevant financial details, your lawyer can help you seek appropriate court orders to obtain the necessary information. 

3. Assuming a 50/50 Split is Guaranteed 

A common misconception is that property will automatically be split 50/50. In Queensland, the Family Law Act 1975 provides a four-step process for determining property settlement:

1. Identifying and valuing all property (assets and liabilities); 

2. Considering the financial and non-financial contributions of each party; 

3. Evaluating future needs (e.g., age, health, income-earning capacity); 

4. Assessing whether the proposed settlement is just and equitable. 

The outcome is based on individual circumstances, and rarely is it a straightforward 50/50 division. Assuming so may lead you to accept less than you're entitled to or prolong negotiations unnecessarily. 

4. Not Considering Superannuation 

Superannuation is often one of the largest assets in a relationship but is frequently overlooked in property settlements. In Queensland, superannuation can be split between parties, either by agreement or by court order. 

Ignoring superannuation can lead to an imbalanced division of assets. It’s essential to: 

• Obtain up-to-date valuations of all superannuation interests; 

• Understand how different types of funds operate; 

• Factor in superannuation alongside other assets for a fair overall settlement. 

5. Letting Emotions Dictate Decisions 

Emotional stress is natural during a separation, but allowing anger, guilt, or resentment to guide your decisions can be detrimental. Agreeing to an unfair settlement out of guilt or refusing to negotiate due to anger can significantly harm your financial future. 

Try to approach property settlement as a business transaction. Engage a trusted  property settlement lawyer who can advocate for your best interests and provide objective advice. 

6. DIY Property Settlements Without Legal Advice 

While it might be tempting to avoid legal fees by handling the property settlement yourself, doing so often results in costly mistakes. Without expert guidance, you may: 

• Overlook entitlements; 

• Misunderstand legal obligations; 

• Fail to properly formalise the agreement. 

To ensure your agreement is legally binding and enforceable, always seek legal advice. A  property settlement lawyer can help you draft consent orders or a binding financial agreement to protect your interests long-term. 

7. Failing to Formalise the Agreement 

Even if you and your ex-partner reach an amicable agreement, it must be formalised by the Family Court or through a binding financial agreement. Without formalisation: 

• The agreement is not legally enforceable; 

• Either party could later make further claims; 

• You may face tax implications, such as stamp duty on property transfers. 

A properly formalised agreement provides finality and peace of mind. Don’t skip this step, even in friendly separations. 

8. Ignoring Tax and Financial Implications 

Property settlements can have significant tax consequences, including capital gains tax (CGT), stamp duty, and changes to income or government benefits. Failing to consider these can lead to unexpected liabilities post-settlement. 

Your lawyer should work in conjunction with a financial advisor or accountant to: 

• Assess potential tax implications; 

• Structure settlements to minimise tax; 

• Ensure informed financial decisions are made. 

9. Undervaluing or Overvaluing Assets 

Accurate valuation is critical in achieving a fair division. Relying on outdated or speculative figures can skew the settlement unfairly. 

Independent valuation is recommended for: 

• Real estate; 

• Businesses; 

• Motor vehicles; 

• Valuable personal items (e.g., jewellery, art). 

Superannuation interests may also require a valuation under the Family Law (Superannuation) Regulations 2001. Accurate valuations ensure transparency and support equitable outcomes. 

10. Choosing the Wrong Legal Representation 

Not all lawyers are experienced in family law, and poor legal advice can cost you both financially and emotionally. When selecting a lawyer, look for: 

• Specialisation in family law; 

• Experience in Queensland property settlements; 

• A clear, communicative approach. 

Choosing a local firm like property settlement lawyers in Townsville ensures you receive advice that aligns with local court processes and regional considerations. 

Secure Your Future with Expert Legal Help 

Property settlements can be complex, but avoiding these common mistakes goes a long way in ensuring a smooth and fair resolution. If you’re going through a separation or divorce, don’t leave your financial future to chance.

The experienced team at Sarinas Legal can guide you every step of the way. Contact Sarinas Legal today to protect your rights and secure a fair property settlement tailored to your needs.