Can my ex-spouse claim money after divorce?

When a marriage comes to an end, a divorce is required to legally terminate the arrangement. However, a divorce does not automatically sever financial ties, which means both parties could be exposed to financial and property-related claims later on, particularly where there is no legally enforceable financial/property settlement in place.

While the Family Law Act 1975 contains provisions that make it harder for claims to be brought against an ex-spouse after twelve months from the date of a divorce (or two years after a de facto relationship separation), an ex-spouse's claim may still be possible, in either scenario.

Below we explore the current rules, risks and tips to consider to protect your wealth and assets after separation.

Requirements for filing for divorce in Australia

In Australia, filing for divorce is generally one of the final steps in the separation process. Before applying for divorce, parties must be separated from their spouse for a minimum period of twelve months. Additionally, on the date the divorce application is filed with the Federal Circuit and Family Court of Australia (the Court), either party, or both, must be:

• an Australian citizen; or
• domiciled/residing in Australia; or
• ordinarily residing in Australia and have been present in Australia for one year immediately prior to filing the divorce application.

Asset exposure post separation

Neither the divorce nor the separation date marks a point at which post-separation assets are protected from an ex-spouse's claims. In fact, parties have a further twelve months from the date of divorce (or two years after a de facto relationship separation), by which to:

• resolve the division of property and file an Application for Consent Orders with the Court; or
• commence court proceedings for the Court's assistance with the division of property.

While this period can extend beyond the twelve-month timeframe after divorce (or two years after a de facto relationship separation) in some instances, it is likely not without complexity and added expense to parties.

Division of property

If parties entered a financial agreement (otherwise known as a prenuptial agreement) before or during their marriage (or relationship), the "roadmap" for division of properties, investments and other assets held in Australia and overseas (i.e. a property settlement) will be set out in that agreement.

Otherwise, in most circumstances, the division of property is negotiated by, or on behalf of, the parties following separation and a settlement agreement can be reached.

If an agreement cannot be reached between the parties, however, assistance from the Court may be required.

Finalising an agreement on property division

Once a settlement agreement is reached by parties, that agreement is not actually final and legally binding until an Application for Consent Orders has been filed with the Court and the Court has made the Orders sought. Alternatively, parties may choose to formalise the settlement agreement by entering into a binding financial agreement to avoid the Court scrutinising the settlement agreement.

If a settlement agreement is not finalised by way of Orders from the Court or a binding financial agreement, either party may renege on the settlement agreement and bring a property claim against the other. In some circumstances, this can happen years after separation or divorce, even if each party previously agreed to retain their own assets.

Protecting your assets

Separation can be complex and emotionally charged but there are ways to avoid and manage exposure to risks if dispute arises.

Thoughtful preparation is critical in safeguarding your wealth and assets, today and into the future, including properly documenting settlements by way of Court Orders or a binding financial agreement.

Lander & Rogers' family lawyers have extensive experience advising individuals on matters relating to division of property, investments and other assets before and after divorce. If you have questions regarding asset protection before or during a relationship/marriage in relation to financial disputes in the event of a relationship/marriage breakdown, or division of property after separation (before or after divorce) please contact a member of the Family & Relationship Law team for further advice.

This article was last reviewed in October 2024

Photo by Kelly Sikkema on Unsplash.