September 27, 2023

Common issues and pitfalls in family law property settlement


The family law system is designed to ensure fairness and equity, but there are pitfalls that individuals should be aware of to protect their rights and interests in a property settlement. In this article, we will explore some of those common pitfalls.

A family law property settlement can be complex and emotionally charged affairs. When couples decide to separate or divorce, they often find themselves navigating a legal landscape filled with nuances and intricacies. 


Lack of Legal Representation

One of the most significant pitfalls individuals face in family law property settlements is choosing to go through the process without legal representation. While it may seem like a cost-saving measure, it can lead to significant disadvantages. A competent family lawyer is well-versed in the complexities of family law, and their expertise can help you navigate the process effectively. They can provide valuable advice, negotiate on your behalf, and ensure that your rights are protected throughout the property settlement process.

Even if you and your former partner agree on most aspects of the property settlement, it’s essential for both parties to seek independent legal advice. Family lawyers can review the proposed settlement to ensure that it is fair and legally sound. This step can help prevent future disputes and costly legal proceedings, as well as ensure that you fully understand the implications of the agreement you are entering into.

Not Entering into a Legally-Binding Property Settlement

Even if you and your former partner come to a property settlement agreement and divide your property and assets in accordance with that agreement, if you do not enter into a legally-binding property settlement document (such as Consent Orders or a Binding Financial Agreement), a family law claim can be made against you by your former partner in the future. Such a claim may well take into consideration any assets or savings that you accumulate, or any debts that your former partner may incur, from now until that future date of claim. Things become even more complicated in the event someone has repartnered and has mixed finances with that new partner. It is strongly recommended that parties to a separation each engage an experienced family lawyer to assist with legally-documenting their agreement.

Ignoring Alternative Dispute Resolution (ADR) Options

Where there are contentious issues or significant animosity, there may be a desire to go to court as soon as possible without considering alternative dispute resolution methods like mediation. While there are circumstances such as cases of urgency where court is required, ADR should always be considered as a quicker and less adversarial way to resolve disputes and reach a settlement. By bypassing ADR options, you may end up with a more contentious and costly legal battle. The Federal Circuit and Family Court of Australia not only encourages, but usually requires parties to attempt ADR before proceeding to litigation, and it’s essential to explore these options early in the process.

Inadequate Financial Disclosure

Full financial disclosure is a fundamental requirement in property settlements. Both parties are obligated under the law (even if the case does not proceed to court) to provide complete and accurate information about their financial circumstances, including assets, debts and financial resources. Failing to do so can lead to a settlement based on incomplete or misleading information, which may be unfair. Where a case goes to court, the court takes a dim view of non-disclosure and non-compliance could well negatively affect one’s case. It’s crucial to be transparent and ensure that you have access to all relevant financial information.

Overlooking Tax Implications

Property settlements often involve the transfer of assets, which can have tax implications. Failing to consider these tax consequences can lead to unexpected financial burdens down the road. This may include capital gains tax, income tax or tax-consequences in relation to changing the holding or winding up a trust or company. Consulting with an accountant or tax lawyer can help you understand the tax implications of the proposed settlement.

Rushing the Settlement Process

Property settlements can be lengthy and emotionally draining, and it’s natural to want to resolve the matter as quickly as possible. However, rushing the process can lead to hasty decisions that may not be in your best interest. Take the time to fully understand your options, consult with professionals, and negotiate thoughtfully. It’s better to invest time upfront to secure a fair and equitable settlement.

Underestimating the Emotional Toll

Divorce or separation is emotionally challenging, and this can affect your decision-making during the settlement process. Emotional decisions may not always align with your long-term interests. Seek emotional support from friends, family, or a professional counsellor/psychologist to help you cope with the emotional strain. It is important to speak to your family lawyer and take time to consider before making critical decisions about your future.

Neglecting to Update Wills and Estate Planning

After a family law property settlement, it’s essential to update your will, estate planning documents and superannuation and insurance beneficiary nominations. Failing to do so can result in unintended consequences in the event of your passing.


Family law property settlements can be challenging, but steps can be taken to ensure that your rights and interests are best protected – seek legal advice, obtain full financial disclosure and consider alternative dispute resolution methods. While it may be an emotionally taxing journey, a well-informed and thoughtful approach can better lead to positive outcomes in your family law property settlement. Remember that consulting with experienced professionals, such as a family lawyer, and also accountant or tax lawyer is often critical in navigating this complex process. 

For an obligation-free chat, please contact one of our expert family lawyers in Ringwood and Mount Waverley on 0421 397 316 or at

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