Property or financial settlement is how assets are divided between parties after their marriage or de facto relationship breaks down. Broadly, the process is the same regardless if you were married or in a de facto relationship.
Why do you need a lawyer?
Dividing property under the provisions of the Family Law Act can happen through three ways:
- Binding Financial Agreements
- Consent Orders
- Initiating an action in Court
Regardless of which way you go, a lawyer can assist you with the process and help divide the property and always ensure your best interest is at the forefront.
How is property divided?
The Family Law Act gives very broad discretionary power to the Court in deciding how to divide these assets. Contrary to popular belief, there is no hard and fast “rule” that the “starting point” is 50% or that there is a “right” way to mathematically calculate which party gets what percentage. The powers of the Court allow it to make orders that are just and equitable in the particular circumstances of the case (case law permitting).
Generally, the Court takes a 4-step (some would argue 5 step) approach to how to divide these assets:
- What assets form the asset pool to be divided?
This steps looks at what assets there are in the ‘asset pool’ to be divided. To know this, the parties have to make what is called ‘full and frank disclosure’ of their financial position to the other party and must produce certain documents to their former partner or spouse that satisfy legislative requirements. The Courts look badly on non-disclosure or an unwillingness to do so, even going so far as to make costs orders against the non-disclosing party.
Looking at what ‘assets’ actually are is important. Essentially, if it can be valued, it is property and should form part of the asset pool. This includes real estate, motor vehicles, jewellery, shares, cash, furniture, businesses, even livestock. Superannuation is not immune to division – the Court can also make an order for a party’s superannuation to be divided as part of a property settlement.
- What contributions did the parties make to that asset pool, to get it to where it is today?
The Court looks at both financial and non-financial contributions to the asset pool. In cases where one party worked and earned more and the other stayed home and attended to all homemaker duties, there is no presumption that because the working party pulled in all or most of the cash, that they are entitled to withdraw that cash (so to speak) at that point.
At this point, the Court looks at what each party did in contributing to the asset pool, whether it be working in paid employment, attending to renovations around the home, washing and servicing motor vehicles, caring for children and even washing plates and ironing clothes. Once the Court looks at all of these, it comes to a percentage of what the split should be between the parties.
- What does the future look like for each party and what are their future needs?
After the Court comes to a percentage position for the parties, it then considers what the future looks like for each party. Some considerations are the parties’ income or earning capacity, their health and age and whether one party has primary care of children.
- Is the proposed division just and equitable to each party?
How ‘just and equitable’ looks for any given matter very depends on the circumstances of each case. To get to this point involves a careful and methodical consideration of the three prior steps and a willingness on part of each party to come to a resolution without undue delay.
How can we help you?
At HNT Legal, we know it is difficult enough to go through a separation without having to think about who gets what. We take a collaborative approach to family law and aim to ensure that what you put into the relationship, is what you get out of it.