Many people going through a separation are hopeful or the idea that their property will be divided equally between the separating parties. But this is not the case.
This is a question that as family lawyers, we often get asked, but the answer is… well no, it is not quite that simple.
Let me help you understand how the division of property works in family law matters in Australia. Not every matter, simply divides the asset pool or the family home in a fifty, fifty manner. In fact in our experience more often than not, the property is not divided on an equal basis.
In Australia, when parties go through a separation or divorce and it is not equally divided, how does it work?
The Family Law Act 1975 sets out what is known as the four-step process in determining property division within a property settlement.
The four steps include:
- Identification and valuation of all assets.
- Contributions of each party, this includes both financial and non-financial.
- Future needs of the parties.
- A just and equitable outcome for the parties.
Step 1: Identification and valuation of assets
This step is where all the assets are identified and values are agreed up by the parties or valued independently. Assets can be considered in terms of property and financial resources. To identify the assets of the relationship, full and frank disclosure is required. Sometimes this step is straight forward but other times this step can become a difficult area if the parties are unable to agree on assets and the values of those assets.
Step 2: Contributions
When determining the contribution that each party has made to the asset pool, both financial and non-financial contributions are considered. Contributions that the parties each had at the commencement of cohabitation, contributions during the relationship, and post-separation are all considered.
Step 3: Assessment of future needs
In addition to the consideration of the contributions made by each party, the future needs of each party are also considered. The court asses if one party has greater future needs than the other due to financial disparities. Factors such as the age and health of each of the parties, the income and financial resources of each of the parties, and if either party has the care of a child of the marriage/relationship under 18 years or not.
Step 4: Just and Equitable Outcome
Finally, in the four-step of the process it must be determined that the outcome reached is just and equitable for both parties given all the facts and circumstances of the matter.
The way in which property is divided when a major long term relationship breaks down is a lot more complex that one may believe or think. There are many factors that are assessed and depending on the circumstances of the relationship, it depends as to how straight forward or complicated it can be. As lawyers, we initially advise you on your matter with our free initial consultation as this allows us to assess your matter and give you legal advice as to your next steps. Usually, in a first initial appointment, we are able to give our clients an idea of what percentage range they may be entitled to.
At Collective Family Law, we offer appointments with one of our skilled family lawyers in our Gold Coast or Brisbane family law office.