Not So Frequently Asked Questions About Divorce in Australia

Clarity Lawyers Blog Not So Frequently Asked Questions About Divorce In Australia

Many people going through a divorce feel lost and unsure of the process, which makes it even more draining and stressful. To alleviate some of that stress and help you make informed decisions regarding the divorce process, our expert family lawyers answered some of your less common, but burning questions about divorce below.


1. How does divorce impact immigration status or visas?

If your visa is based on marriage (e.g., spousal visa), a divorce can lead to visa cancellation. The immigration department might suspect the marriage was entered into solely for immigration purposes, or a sham marriage.

That’s why recently divorced applicants who are on spousal visas often face challenges proving the marriage was genuine, especially if the relationship was short. Evidence of cohabitation, shared finances, and social ties becomes crucial.

Depending on your situation, you might need to explore alternative visa options like work visas or independent skilled migration programs.


2. How does divorce impact your permanent residency?

If you already have permanent residency (green card in some countries) at the time of divorce, your status typically remains unchanged. However, if permanent residency was obtained through a recently ended marriage (especially a short one), immigration authorities might also investigate the genuineness of the relationship.

If you were separated but not divorced when applying for permanent residency based on marriage, the process might be delayed.


3. What happens to joint debts or loans after divorce?

Courts often assume debts incurred during the marriage, whether jointly or individually, were for the couple’s mutual benefit. This means the responsibility for debts like mortgages, credit cards, or personal loans could potentially be split equally between both parties.

There can be exceptions to the equal split approach:

  • If a debt was solely for one spouse’s benefit (e.g., gambling debts), the court might assign more responsibility to that spouse.
  • The court may consider each spouse’s income, future earning potential, and financial situation. A spouse with a higher income might be assigned a larger portion of the debt, especially if the other spouse is financially disadvantaged post-divorce.
  • Debts incurred after separation are generally not considered shared marital debt.

There are a few ways to handle joint debts in a divorce settlement:

  • Sell Assets – assets like a house might be sold, and the proceeds used to pay off debts before dividing remaining assets.
  • Refinance Debt – one spouse might refinance the debt into their sole name, assuming full responsibility. This requires the creditor’s approval.
  • Payment Plan – a court-ordered payment plan might be established, outlining each spouse’s contribution towards repaying the debt.

It’s crucial to have clear documentation of all joint debts and loans, including account statements and credit card balances. This helps ensure a fair and accurate division during the settlement.

If you find yourself in these situations, Clarity Lawyers can help you. We’ll represent your interests, negotiate the debt division, and ensure your rights are protected.

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4. How is pet custody determined?

Pets are cherished members of the family, and unfortunately, their well-being can become a point of contention during divorce. Unlike children, pets are generally considered property under the law. However, courts prioritise finding an arrangement that serves the pet’s best interests.

Here’s how pet custody is typically determined:

Reaching an Agreement (Preferred)

The most desirable outcome is for both parties to reach an amicable agreement regarding pet custody. This can involve determining crucial factors like:

  • Who has historically been the primary caretaker, responsible for feeding, walking, and vet visits?
  • Who can comfortably afford pet expenses like food, insurance, and potential vet bills?
  • Does one party have a living situation better suited for the pet (e.g., fenced yard for a dog)?

Once an agreement is reached, consider formalising it through a pet parenting plan or including it in the overall divorce settlement.

Court Involvement

If an agreement can’t be reached, the court will get involved. Here’s what they might consider:

  • legal ownership (registration, microchip)
  • similar to an agreement, the primary caregiver for the pet
  • each party’s ability to afford pet expenses can be a deciding factor
  • Pet’s well-being, an arrangement that minimises the stress for the pet.

In some cases, shared custody with visitation schedules might be an option. If children are involved, the court will also consider how pet custody affects their emotional well-being.

Pet custody laws vary by location. If you’re facing such a situation in New South Wales, consulting Clarity Family Lawyers is recommended for navigating pet custody during and after divorce.


5. Can divorce proceedings affect future inheritance?

In general, divorce proceedings in Australia typically do not directly affect your future inheritance. Courts primarily focus on dividing assets and liabilities acquired during the marriage. A future inheritance you haven’t received yet isn’t considered part of the marital pool.

However, there are rare situations where your future inheritance might affected:

  • If an inheritance from a specific source is almost guaranteed and substantial compared to the existing marital assets, the court might consider it in determining a fair property settlement.
  • If you received an inheritance during the marriage and used those funds to benefit the couple (e.g., buying a house), those specific assets might be subject to division.

Divorce settlements primarily aim for a just and equitable division of existing assets and liabilities, considering each spouse’s future financial needs.

If you have a complex situation involving a significant future inheritance, contact Clarity Lawyers for expert legal advice.


6. How does divorce affect retirement plans and superannuation?

In Australia, superannuation is treated as a financial asset, just like your house or car. This means it can be divided between you and your ex-partner during the settlement.

There are a few ways to handle this division:

Splitting the super

This is the most common approach. A fair share of your super contributions made during the relationship (including any earnings on those contributions) is calculated and transferred to your former partner’s super fund.

Different methods for valuing and splitting super are utilised and factors like your income disparity and length of the relationship are normally considered.

Deferring the decision

If you’re amicable and unsure about the future, you can postpone dividing the superannuation. It will remain untouched for now, but a clause in your agreement outlining how it will be handled later, perhaps closer to retirement, will be included.

Court order

If an agreement can’t be reached, the court will issue a splitting order, dividing your super based on factors like the length of the marriage, contributions each made to the super, and your future earning capacities.

Even after a split, the super remains subject to preservation rules. You and your ex-partner generally can’t access it until you reach your preservation age (currently between 59 and 67 depending on your birth year).

Divorce settlements involving superannuation can be complex. Speak with us so we can help you navigate your situation.


7. What are the implications for family-owned businesses or partnerships?

In most cases, the family business is considered a marital asset, just like the house or any other jointly owned property. This means its value needs to be factored into the overall property pool to be divided during the settlement.

However, unlike your house with a clear market value, a family business can be trickier to assess. We’ll need to consider factors like future earning potential, current financial health, and even the brand value.

There are a few ways to handle the business to move forward:

  • Buyout – one spouse can buy out the other’s share of the business. This might involve using other marital assets like the house or taking out a loan.
  • Spousal continuation – if one spouse is heavily involved in running the business, they might keep it, potentially compensating the other spouse with a larger share of other assets.
  • Sell the business – this might be the best option if continuing together is impractical due to tension or if other assets are insufficient. The proceeds from the sale would then be included in the property pool.
  • Pre-existing buy-sell agreement – ideally, the business might have a pre-existing buy-sell agreement outlining what happens in case of a divorce. This can save a lot of time and emotional strain.

It’s important to remember that a messy divorce can damage the business itself. Speak with Clarity Lawyers and we’ll work towards a solution that minimises your stress and protects the future of the company and your interests, especially if there are other family members involved.

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8. How are digital assets and cryptocurrencies handled in divorce?

Since cryptocurrency is a new asset class, the legal framework surrounding its division in divorce is still under development. Court precedents are emerging, but it’s best to approach it with caution and ensure everything is documented transparently.

Unlike a house or car, cryptocurrency is intangible and its value can fluctuate wildly.  Pinning down its worth at a specific point in time can be tricky. The purchase price, current market value, and past transactions might need to be considered to create a fair valuation.

Once we have a value of the digital asset, there are a few ways to handle it:

  • Splitting the holdings proportionally, depending on when it was acquired and how much each spouse contributed.
  • One spouse could sell their share and provide the other with cash equal to the value of their crypto holding.
  • In some cases, the court might decide the value of the cryptocurrency and treat it like other assets in the pool, offsetting it with other holdings.

Crypto is a relatively new type of asset in divorce settlements. But like any other asset, full disclosure of any cryptocurrency holdings is crucial. There’s an obligation for both parties to be transparent about their financial situation. Hiding them can have serious consequences, including penalties from the court.

If crypto is involved in your divorce settlements, speak with us so we can work together to find the most effective and transparent way to handle this digital asset in your specific situation.


9. Are there differences in handling divorce for same-sex couples?

In Australia, since same-sex marriage became legal in 2017, the process of divorce for same-sex couples is the same as for heterosexual couples. The law treats both marriages equally regarding the division of assets, child custody arrangements (if applicable), and spousal support.

There might be some minor variations depending on your specific circumstances, but overall, the same legal principles and procedures apply.

If you have any concerns specific to your situation, don’t hesitate to ask. Remember, every case is unique, and open communication is key to achieving a smooth and successful resolution.


10. How does divorce affect government support payments?

Divorce itself doesn’t directly affect most government support payments in Australia. However, the changes in your living situation after the divorce can certainly impact your eligibility or the amount you receive for certain benefits. Here’s a breakdown of some common scenarios:

Centrelink payments for parenting

  • Parenting Payment – if you’re the primary carer for your children after the divorce, you might be eligible for Parenting Payment from Centrelink. This payment helps with the cost of raising children.
  • Family Tax Benefit – both separated and divorced parents with children may be entitled to Family Tax Benefit, which provides additional financial support. The amount you receive will depend on your income, number of children, and their ages.

Income support for yourself

If you’re unemployed or looking for work after the divorce, you might be eligible for JobSeeker Payment from Centrelink. This provides temporary income support while you search for a job.

The key thing to remember is that Centrelink assesses your individual circumstances, including your income, living arrangements, and childcare responsibilities.

Remember, there’s no shame in seeking help.  Government support programs are there to assist Australians during times of need, and a divorce can certainly be one of those times.


11. How are intellectual properties handled in a divorce?

If the IP was created or acquired during the marriage, it’s generally considered marital property and subject to division during the settlement. This includes things like patents, copyrights, trademarks, and even business inventions developed during the marriage.

On the other hand, the IP you owned before the marriage, or inherited during the marriage, might be considered separate property. However, things can get complicated if you used marital funds to significantly develop or improve pre-marital IP, your spouse might have a claim to a share of its value.

There are a few ways to handle marital IP in the settlement:

  • One spouse can acquire full ownership of the IP, potentially by compensating the other with other marital assets.
  • The couple can establish a formal agreement where the spouse who keeps the IP ownership pays royalties or licensing fees to the other based on its future earnings.
  • In some cases, selling the IP and splitting the proceeds might be the best solution, especially if future management would cause friction.

Remember, every situation is unique.  The best approach depends on the type of IP, its value, your contributions to its development, and your desired outcome.

If you find yourself in these situations, Clarity Lawyers can help you navigate ensure a fair and  transparent resolution regarding your intellectual property in the divorce settlement.


12. What are the consequences of hiding assets during a divorce proceeding?

Hiding assets during a divorce in Australia is a serious offence and can have significant legal and financial repercussions. If the court discovers you deliberately hid assets or provided false financial information, you could be found in contempt. This can lead to fines or even imprisonment in extreme cases.

The court can also impose significant financial penalties on top of the property division. This is essentially a punishment for wasting the court’s time and resources, and for attempting to deceive your spouse.

Even if you manage to avoid detection, the court can still draw negative conclusions from your lack of transparency which could lead to a less favourable property settlement for you.

If your spouse is left financially disadvantaged due to your hidden assets, the court can order you to reimburse them or compensate them for the additional legal costs incurred in investigating your actions.

Remember, full financial disclosure is a legal requirement in Australian divorce proceedings.  Being honest and transparent, even if you think it might disadvantage you initially, is ultimately the best course of action.  We can work together to achieve a fair settlement that considers all your assets and liabilities.


13. How does a history of domestic violence affect divorce settlements?

A history of domestic violence can certainly influence a divorce settlement in Australia. The key factor the court considers is how domestic violence affected a spouse’s ability to contribute financially to the relationship. This could be due to:

  • Physical injuries
  • Psychological trauma
  • Reduced earning capacity

A legal principle established in the Kennon case (1997) allows the court to adjust the property division if domestic violence resulted in a spouse’s contributions being “more arduous” than they should have been.

This can involve awarding them a larger share of the assets to compensate for the additional challenges they faced.

For domestic violence to be considered in the settlement, there needs to be concrete evidence. This could include police reports, medical records, or documentation from support services.

It’s important to note that domestic violence itself isn’t an automatic justification for a lopsided property division. However, if it demonstrably impacted a spouse’s ability to contribute financially, the court can and should take that into account to achieve a just outcome.


Seek legal help

Don’t wait to seek legal help during a divorce settlement, even if things seem amicable. We can explain your rights and help you navigate complexities like business assets, debts, or children.

If you find yourself in these situations contact Clarity Lawyers as soon as possible so we can protect your future, avoid legal issues down the line and help you achieve a fair settlement.

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Rli Samantha@2x
Samantha Miller

Samantha has been a lawyer since 2001 having followed in the steps of her father, grandfather, great-grandfather and great-great-grandfather. No one can say she didn’t know what she was getting into!

Initially admitted in 2001 as a solicitor in NSW and Australia, Samantha moved to the UK where she was admitted as a solicitor in England and Wales in 2002. After working in several different areas of the law in large London firms, she determined that family law was her calling and hasn’t looked back.


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