Going through a separation can be an emotionally rough time but along with personal turmoil it can come with a set of financial challenges as well.

Property settlement is the term used for financial settlement that occurs after a couple has separated. It includes all assets like cash, valuable goods, gifts, real estate, investments, family trusts, jewellery, businesses, shares etc. 

One way of settling your property distribution is by way of mutual agreement. If both parties agree to the property division then they can enter into a legally binding financial agreement or they can obtain consent orders from the court.  If you are unable to mutually agree, then the settlement would require litigation in Court. You should be aware that the Court may undergo several hearings prior to a final order being made. 

Criterias used by Courts 

Generally, where there has been a breakdown of a marriage that in itself is often enough to satisfy the Court that it is just and equitable to make an Order for the division of assets.

Once this step has been satisfied, there are generally four steps which 

the Family Law Act 1975 sets out. 

Step 1:

Is to determine all of the assets (and liabilities) available for division, which includes superannuation entitlements.  Generally, all assets, whether they are owned jointly by the parties or by one of the parties independently, will be taken into account in any family law property settlement.  The value of assets is usually the value of that asset at the time the court case is heard by a Judge or at the time of any private settlement, rather than the value of the asset at the time of separation.Is to determine all of the assets (and liabilities) available for division, which includes superannuation entitlements.  Generally, all assets, whether they are owned jointly by the parties or by one of the parties independently, will be taken into account in any family law property settlement.  The value of assets is usually the value of that asset at the time the court case is heard by a Judge or at the time of any private settlement, rather than the value of the asset at the time of separation.

Step 2:

Is to consider the contributions each party has made during the relationship.  These include financial contributions (such as salary, initial contributions of assets, inheritances or gifts) and non-financial contributions (such as in the role of home-maker, parent, to the establishment of a business or in performing renovations). 

Step 3:

Is to consider whether any adjustment needs to be made to take into account the future needs of either party.  Factors such as the age and state of health of each person, whether either person has a duty to support or care for a child of the de facto relationship or any other person, the respective employment prospects of each person, whether either person has re-partnered and the financial circumstances of any new relationship are taken into account.

Step 4:

Any division of property must be "just and equitable".  In order to assess the justice and equity of a property division, the percentages are normally converted into real dollar values.  An assessment is then made as to whether any further adjustment is needed to make the division of property "just and equitable".

Time Limits to file Property Settlement Application:

Parties should be aware that an application to the court for property  orders must be made within the following time duration:

  • Married couples, if they haven't already done so, should file an application within 12 months of the date of the Divorce Order.
  • De-facto couples, if they haven't already done so, must file an application within 2 years of separation.

In such a time of immense stress, it is best to have lawyers that you can rely on. Those lawyers can ensure that you get the best possible outcome for you, your family and future.

Consider a quick chat with us today call (03) 9743 1333.