How does the court consider property settlement?
Step 1: Do we divide our assets?
In some situations, for example a short relationship, it might not be appropriate to divide your assets. At your initial meeting we will discuss how long you have been with and lived with your partner so we can determine if you need to divide your assets.
Step 2: Let’s identify what our assets are?
At this stage we ask for disclosure from both you and your ex-partner to determine the pool of assets available for division.
This includes financial assets including any properties you own, investments, shares, cars, savings, any business in your names. You and your former partner also have a duty to provide full and frank disclosure of your income, superannuation entitlements, and liabilities. You would also be required to disclose if you received any property or disposed of any property before your separation or since the final separation.
Further rule 6.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 requires that each of you continue to provide information to each other until your matter has been finalised.
Should you wish to commence proceedings in Court, is it important to note that you must complete and file an undertaking (being a promise to the Court) that you have complied with your disclosure obligations to the best of your ability and knowledge. There are serious consequences for non-compliance of your obligations and the Court may for example, fine you, put your matter on hold, order costs against you or even imprison you for non-disclosure or for breaching your undertaking provided to the Court.
It’s important to keep in mind this step can take longer than some people anticipate as the value that’s attributed to certain assets can require the assistance of other parties for example having a business or house valued.
At Southern Waters Legal we often use the analogy, we can’t get to the step where we talk about how to divide your piece of the pie if we don’t know how big the pie is.
Step 3: Consider your respective contributions to the assets.
Through the course of your relationship, how did you come to have the assets that you had?
For example your financial contributions:
- What did you have at the outset of the relationship?
- What did you bring in through the relationship by way of your income?
- Did you receive any windfalls throughout the course of your relationship? For example inheritances or gifts from family members or lottery wins?
It’s not just financial contributions that are considered. Non-financial contributions are just as valued and include:
- Your parenting contributions
- Your role as a homemaker
- Have you renovated or maintained the property you both lived in?
Step 4: Consider your future needs (section 75(2) of the Family Law Act 1975)
If either you or your former spouse have one or more of the factors listed below, then an adjustment may be made in that party’s favour.
Generally the following factors are taken into consideration:
- Capacity to earn;
- Any health issues; or
- Future parenting responsibilities for children under the age if 18 years
Step 5: What is just and equitable?
In this step we look at what would the court consider just and equitable (fair) in the circumstances. Every case is different, and the Court assesses each matter based on its own facts. This is where we talk about a just percentage taking into account all of the information we have discussed in the steps above.
If you would like a printable copy please click this link: How does the court consider property settlement?
If you have any questions in regards to your specific circumstances following a separation, please contact one of our family law solicitors on 9523 5535.
Disclaimer: The information contained in this article is provided as general information only. It is not intended to be legal advice and it should not be used or relied on as legal or professional advice.