This was a question that a new family law client asked this week. 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 here in Australia.
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:
1. Identification and valuation of assets.
2. Contributions of each party, this includes both financial and non-financial.
3. Additional Factors
4. Just and Equitable result.
Step 1: Identification and valuation of assets
This step is where it is decided what assets are to be included within the property settlement. 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 agreed on assets and the values.
Step 2: Contributions
When determining the contribution of each party made to the asset pool, both financial and non-financial contributions are considered. Usually contributions are seen as 50/50 but there can be variations depending on the circumstances.
Step 3: Assessment of future needs
In addition to the consideration of the contributions made by each party, additional factors can be taken into account such as:
- The age and health of each of the parties
- The income and financial resources of each of the parties
- Whether the parties are able to have meaningful employment
- Whether either party has the care of a child of the marriage under 18 years
The presence any of the above factors can increase or decrease the amount of property allocated to a party.
Step 4: Just and Equitable Outcome
Finally in the four step process it must be determined that the outcome reached is just and equitable for both parties. This is why it is vitally important that you know all of your entitlements to ensure that you have received a just and equitable outcome.
I hope this is helped dispell some myths, but if you have any further questions please don’t hesitate calling us at Caldwell Solicitors.