Keen on achieving an out of court, private property settlement after your separation? One of the most sensible things you can do is to make a settlement offer to your ex. A settlement offer is simply a proposal that you send to the other party which sets out terms for how the matter could be resolved. Should a settlement offer be accepted, it means you can avoid the financial and emotional costs of litigating your matter through the courts, fast-track resolution of the matter, and ideally achieve a much more amicable parting of your ways with your ex. Here are our tips for making a successful settlement offer.
How to make a settlement offer
There is no time limit for making an offer and either party can make an offer at any time. Offers should be in writing, seeking an agreement to the terms set out in the offer to settle, setting out clearly the proposals you want and why.
Before making a settlement offer, however, firstly ensure that you receive legal advice on what the range of outcomes may be, so that you are making an informed decision in putting forward an offer. Also ensure that your family lawyer has advised you of real costs (already paid and what will be owing up to the date of the settlement offer) plus the estimated costs to complete the matter. If you are on the receiving end of a settlement offer, your lawyer should similarly advise you of your actual costs so that you can take these into account when considering the offer.
Tips for negotiating a fair property settlement
1. Positively reframe the negotiations
Put yourself into the mindset of having the intention of problem-solving rather than winning.
2. Get legal advice early on
Getting lawyers involved early means you’ll know what you’re entitled to and what might be a reasonable settlement offer to make, before attempting negotiation.
3. Know the value of your asset pool
You need to figure out exactly what’s in the property pool (both assets and liabilities) so you can work out what and how things should be divided. If there are disputes over values of assets, it’s sensible to engage the right experts, e.g. a registered property valuer to value real estate, superannuation expert to value defined benefit superannuation interests.
4. Disclose all your financials
In order to value your asset pool and begin negotiations, it’s necessary to have sufficient information about your ex’s finances and all aspects of the matter, whether through formal or informal discovery. Be open with your lawyer and your ex: don’t delay disclosure or provide unclear figures. Provide copies of all relevant documents and information and expect the same in return from your ex.
5. Consider timing
Aim to begin negotiations as early as possible to minimise legal costs. Sometimes, however, it’s best to delay things a little if either party is still too emotional to negotiate reasonably.
6. Treat it like a business transaction
Take a commercial view of your settlement negotiations. Seek the advice of professionals where necessary–for instance, having a cost/benefit analysis done by a finance expert.
7. Find bargaining chips
Your lawyer can help you find things your ex will want but may not get through litigation, and assist you to communicate this to your ex.
8. Don’t start too low, but also don’t start too high
The ideal settlement offer strikes a balance between making a credible offer and leaving some wriggle room. Your offer should be based in the realm of potential outcomes that a court would order, but it’s probably stating the obvious to say it’s better not to go in too low initially.
9. Accept the need for compromise
You must be willing to compromise. It’s inevitable that you won’t get everything you want. For example, a settlement offer might involve accepting a lower price on a property’s value than what was hoped for if time were taken to wait for the perfect sale price. Instead, it may be more economical to speed up the process, even if that means selling an asset for less than what it ideally could have ultimately sold for. And don’t waste time quibbling over things of limited value (e.g. the couch)!
10. But be clear about your limits
Your lawyer will help you understand what these should be, provided they are aware of your needs and goals. Your lawyer will know when you have reached the best possible deal, and they can also advise you on alternative outcomes should negotiations fail.
11. Be reasonable
If your offer is reasonable and fair, simply making the offer can provide a strategic advantage in any future court proceedings. If you go to court and are successful in seeking orders, then you can also ask the judge to consider your early offer and seek an order that the other party pay your costs.
13. Get legal advice if you receive a settlement offer
Make sure you obtain legal advice if you are on the receiving end of a settlement offer as well. You don’t want to reject a reasonable settlement offer and go to court, only to find a judge takes your ex’s early offer into account and awards costs against you! (Although settlement negotiations are not admissible during a trial, it will be considered if your ex is seeking you pay their costs.)
14. Document the agreement properly
A property settlement can be achieved and finalised without court intervention, by means of either entering into a Binding Financial Agreement or applying for consent orders (asking for the court to make orders in accordance with the terms of your agreement). You should speak with your lawyer about which option is better for your situation. (Read also our blog on why you should formalise your family law agreements).
We can help if you need assistance with your property settlement or with formalising your agreement by way of Consent Orders or a Binding Financial Agreement. Please contact Canberra family lawyer Cristina Huesch or one of our other experienced solicitors here at Alliance Family Law on (02) 6223 2400.
Please note our blogs are not legal advice. For information on how to obtain the correct legal advice, please contact Alliance Family Law.