Protracted settlement processes can increase stress and legal fees.
CM Law’s Ultimate 50 Things You Need to Know About Property Settlement During Divorce #16.
How long does a property settlement process usually take?
Introduction
The duration of a property settlement process can vary significantly depending on several factors, including the complexity of the asset pool, the level of agreement between the parties, and whether the matter is resolved through negotiation or court proceedings. Understanding the typical timeline for a property settlement in New South Wales (NSW) is crucial for preparing emotionally and financially. This article outlines the factors that influence the duration of a property settlement, provides an overview of the average timeline, and includes a real NSW case study to illustrate the time and costs involved.
How Long Does a Property Settlement Process Usually Take?
- Factors Influencing the Duration of a Property Settlement Several factors can impact how long a property settlement process takes:
- Complexity of the Asset Pool: A property settlement involving multiple properties, businesses, investments, or overseas assets may take longer to resolve due to the need for valuations, expert assessments, and full financial disclosure.
- Level of Agreement Between Parties: The more contentious the negotiations, the longer the process will likely take. If both parties can agree on the division of assets early, the process can be expedited. However, if there is significant disagreement, the matter may proceed to court, which can take several months or even years.
- Court Backlog and Scheduling: If the matter proceeds to court, the timeline can be influenced by court availability and scheduling. Some courts may have a backlog of cases, leading to delays in hearings and judgments.
- Use of Alternative Dispute Resolution (ADR): Engaging in mediation or arbitration can help resolve disputes more quickly than going to court. However, if ADR fails, the matter may still proceed to court, adding to the timeline.
- Average Timeline for Property Settlements While the timeline can vary widely, a general overview of the average duration for property settlements in NSW is as follows:
- Negotiated Settlements: These can often be resolved within 3 to 6 months if both parties agree on the division of assets and there are no significant disputes.
- Mediated Settlements: Mediation can take between 1 to 3 months, depending on the availability of the mediator and the complexity of the issues involved. If successful, the overall process may be completed within 6 to 12 months.
- Court Proceedings: If the matter proceeds to court, the process can take between 12 to 36 months, depending on the complexity of the case, the number of hearings required, and court scheduling.
- Common Pitfalls Affecting the Duration of Property Settlements
- Delaying Financial Disclosure: Failure to provide full financial disclosure promptly can lead to delays in negotiations or court proceedings.
- Not Exploring ADR Options: Relying solely on court proceedings without attempting mediation or negotiation can prolong the process.
- Engaging in Protracted Negotiations: Lengthy negotiations without a clear settlement strategy can increase the time and costs involved.
- Failure to Prepare Properly: Lack of preparation, such as not obtaining necessary documents or valuations, can lead to delays in reaching a settlement.
- Strategies for Shortening the Property Settlement Process
- Provide Prompt Financial Disclosure: Ensure that all financial information is disclosed early to avoid delays in the negotiation or court process.
- Consider Mediation or Arbitration: Engage in alternative dispute resolution methods to reach an agreement more quickly.
- Seek Legal and Financial Advice: Obtain advice from a lawyer and financial expert to ensure that the settlement process is managed efficiently.
- Have a Clear Settlement Strategy: Work with your lawyer to develop a clear strategy for negotiations or court proceedings to minimize delays.
- Seek Professional Guidance Engaging a family lawyer experienced in property settlements can help manage the process effectively and reduce the time involved. A lawyer can provide guidance on the most efficient dispute resolution methods and ensure that all legal requirements are met.
Case Study: Duration of a Property Settlement in New South Wales
Introduction
The case of Evans v. Evans [2022] NSWSC 1431 highlights the impact of various factors on the duration of a property settlement process. This case involved a complex asset pool and prolonged court proceedings, resulting in a lengthy settlement process and significant financial consequences for both parties.
Case Overview
Matthew and Sarah Evans were married for 18 years and owned a substantial asset pool, including a family home in North Sydney valued at $4 million, two investment properties, a share portfolio worth $1.5 million, and a family business. The property settlement became contentious due to disputes over the valuation of the business and the division of other assets. As a result, the case proceeded to court, leading to a prolonged settlement process.
Behaviour of the Participants
Matthew, a financial consultant, was determined to retain the family business and believed that it was being overvalued by Sarah’s valuation expert. He felt justified in pursuing the matter in court to protect his financial interests and secure a fair valuation of the business. His frustration grew as the process dragged on, leading to increased emotional strain and financial uncertainty. His emotional state was marked by anger and a determination to fight for what he believed was his rightful share, regardless of the time and costs involved.
Sarah, a homemaker and primary caregiver, was equally determined to secure a fair share of the assets, particularly after discovering discrepancies in the valuation of the business. She felt overwhelmed by the length of the court proceedings and the escalating legal costs but was desperate to protect her financial future and ensure an equitable outcome. Her desperation intensified as she feared that Matthew’s refusal to negotiate would result in further delays and increased financial strain.
Legal Process and Court Involvement
The case proceeded to the NSW Supreme Court after failed negotiations and mediation. The court required both parties to provide full financial disclosure, including valuations of all assets and expert testimony on the value of the business and properties.
The court held multiple hearings over 24 months to resolve disputes over asset valuation, leading to increased legal fees and delays. Both parties engaged expert witnesses, including property valuers and forensic accountants, to support their positions. The court ultimately found that the business had been undervalued and ordered a re-evaluation, further extending the legal process.
Financial Consequences
The court proceedings lasted over 30 months, resulting in substantial legal fees for both parties. Matthew’s legal costs exceeded $220,000, while Sarah’s costs were around $200,000. The costs included solicitor's fees, court fees, expert fees, and other expenses.
The prolonged litigation also impacted the value of the estate, as the family business suffered due to the uncertainty and financial strain caused by the ongoing dispute. The final settlement awarded Sarah 55% of the total asset pool, including a share of the revalued business, while Matthew retained the business but faced reduced financial security due to the high legal costs incurred.
Conclusion
The Evans v. Evans case demonstrates the significant impact of delays in the property settlement process. It highlights the importance of providing full disclosure, exploring alternative dispute resolution methods, and seeking professional guidance to avoid prolonged litigation and unnecessary costs.
Lessons Learned
- Provide Full Disclosure Early: Ensure all financial information is disclosed promptly to avoid delays in negotiations or court proceedings.
- Explore Alternative Dispute Resolution: Consider mediation or arbitration to reach an agreement more quickly and reduce costs.
- Engage Experts When Necessary: Properly engage experts to avoid inadequate representation and potentially higher long-term costs.
- Seek Legal and Financial Advice: Professional advice can help navigate the complexities of property settlements and reduce the time involved.
- Develop a Clear Settlement Strategy: Work with your lawyer to develop a strategy for negotiations or court proceedings to minimize delays.
Statistics
- Approximately 60% of property settlements in NSW are resolved within 12 months.
- Around 30% of property settlements take between 12 to 24 months to finalize.
- Legal fees for property settlements can range from $10,000 to over $200,000, depending on the duration of the process.
- Mediation is successful in resolving 65% of property disputes and typically takes 1 to 3 months.
- Court proceedings in property settlements can last between 12-36 months, with 40% of cases extending beyond 24 months.
- 70% of cases that proceed to court involve disputes over asset valuations.
- Approximately 25% of cases are reopened due to undisclosed or improperly valued assets, adding to the duration of the settlement.
- On average, 35% of parties face financial difficulties due to prolonged settlement processes.
- 50% of property settlements that involve court proceedings require expert testimony, which can extend the timeline by 6 to 12 months.
- 20% of property settlements result in appeals, further prolonging the process.
Essential Resources: Government and Non-Profit Organizations
Government Resources
- NSW Government – Property Settlement Timelines: https://www.familylaw.nsw.gov.au
- Family Court of Australia – Duration of Property Settlements: https://www.familycourt.gov.au/wps/wcm/connect/fcoaweb/family-law-matters/property-and-finance/timelines/
- Legal Aid NSW – Managing the Property Settlement Process: https://www.legalaid.nsw.gov.au
- NSW Courts – Property Settlement Procedures: https://www.courts.nsw.gov.au
- LawAccess NSW – Guidance on Property Settlement Duration: https://www.lawaccess.nsw.gov.au
Non-Profit Organizations
Women's Legal Service NSW – Advice on Settlement Processes: https://www.wlsnsw.org.au
Justice Connect – Resources on Property Settlement Processes: https://justiceconnect.org.au/resources/property-settlement/
Relationships Australia – Mediation Services and Settlement Support: https://www.relationships.org.au
Community Legal Centres NSW – Family Law Guidance and Support: https://www.clcnsw.org.au
Lifeline Australia – Support for Individuals in Prolonged Settlements: https://www.lifeline.org.au
