Two separate processes
People tend to think of divorce as one thing. Legally it's two.
The divorce is the court ending the marriage. Since 1976 there has been only one ground for it in Australia: the marriage has broken down irretrievably, and the court accepts 12 months of separation as proof of that. You can apply on your own or together. Once the order is made, it becomes final one month and one day later.
The property settlement is the division of what you own and what you owe. Real estate, savings, investments and debts are split between you under the Family Law Act. The aim is a just and equitable outcome, taking into account the property available, how long you were together, what each of you contributed, and what each of you will need going forward. It applies to de facto couples as well as married ones.
You can do them in either order. Nothing in the law says the property has to be sorted before the divorce goes through.
How the timing actually works
You can start negotiating the property from the day you separate, and you can finalise it any time before or after the divorce.
The catch is what happens once the divorce is final. From that date you have 12 months to either formalise an agreement by consent or start court proceedings. Miss it, and you need the court's permission to apply out of time, which is not given lightly.
Say Nadia and Chris, from Springfield Lakes, separate in March. They apply for a divorce the following March, once the 12 months is up, and the order becomes final in May. They now have until May of the year after to sort out the house, the super and the car loan. That sounds like plenty of time. It usually is, right up until it isn't. If they spend the first ten months not quite getting to it, they'll be signing consent orders or filing an application in a hurry, and hurried settlements tend to be worse ones.
The case for divorcing first
There are reasons people do it. Finalising the divorce can bring a sense of closure, and let someone move on emotionally before the money side is resolved. Where there's very little shared property, or a financial agreement is already in place, doing the divorce first can keep things simple.
The case against
Financial uncertainty is the big one. Until the settlement is done, neither of you can plan properly, because you don't know what you'll be left with.
There's also the risk that things change. If one of you has a big shift in circumstances after the divorce, it can affect how the settlement plays out. And the 12-month clock adds pressure that can push people into settling quickly rather than settling well.
Weigh all of that with advice, not on your own. Our view, having watched it play out many times, is that settling the property first is the safer option.
Why settling first is usually the calmer route
With the property resolved, the divorce becomes a formality. There's no race against a limitation date. Both of you know where you stand financially, which tends to lower the temperature on everything else. And getting the money side finished early gives people room to focus on adjusting to life apart rather than on the next negotiation.
It also tends to mean fewer drawn-out disputes, because the thing most couples fight about has already been settled.
If you've missed the 12 months
It's not the end of the road, but it's a harder road. You'll need the court's leave to apply out of time, and the court grants it sparingly. The circumstances that can support it include hardship, where you can show that refusing would cause you or a child real financial difficulty, and consent, where both of you agree to the late application in a formal way, which is usually handled through lawyers. The court also has a general discretion where it's just and equitable, but that usually means showing exceptional circumstances stopped you applying earlier.
The burden of proving all of this sits with the person asking. Far better to stay inside the time limit than to rely on getting past it.
Questions people ask
Do I have to be divorced before I can do a property settlement? No. You can negotiate and finalise a property settlement at any time after you separate, before the divorce is even applied for.
Does the 12 months run from separation or from the divorce? From the date the divorce order becomes final. Separation starts the clock for applying for the divorce, not for the property time limit. The time limit for de facto couples runs differently, so ask us if that's your situation.
Can we agree to extend the time limit? Both parties can consent to an application being made out of time. It needs to be done formally, and it's usually prepared by lawyers so it holds up.
Where this comes from
- The Family Law Act 1975 (Cth): the ground for divorce and when a divorce order takes effect, the property settlement considerations, and the 12-month time limit with the court's power to grant leave to apply out of time.
How Stanford Legal can help
Our family law team can map out the order that suits your situation and keep you inside the deadlines that matter. If you're already past one, we can advise on the way through. The first conversation is free. Call 0483 980 001 or book a time online.
This article is general information for Queensland readers, current at the time of writing. It isn't legal advice for your situation. Liability limited by a scheme approved under Professional Standards Legislation.
