What Are My Entitlements in a Property Settlement?

One of the basic issues which require addressing following the breakdown of
marriage or de-facto relationship is the subject of property settlement. A
property settlement is an arrangement which is made between the separating
parties when dividing assets, liabilities and financial resources {such as family
trust, bank deposits or future inheritance}. There is no presumption in family
law whereby each party receives an equal division of assets in a property pool.
Each case is unique and varies depending on its individual set of circumstances.
For this reason, each property settlement should be approached in a bespoke
manner to ensure a just and equitable result is achieved for the separating
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In assessing this criteria, there are five {5} steps that the Courts consider when
separating parties are contemplating a property settlement following the
breakdown of their relationship.
This article explains the five {5} important steps.
The Five {5} Step Approach:
Step 1: Identify The Assets Available For Division
The first step is to identify and determine the net asset pool of the
relationship. This may involve identifying whether the current assets and
liabilities of each party are held jointly with the former partner or separately.
Each party must provide full and frank disclosure of their personal property,
including real estate, motor vehicles, bank accounts, shares and
superannuation as required by the Family Law Act 1975.
Parties should also account for other financial resources such as whether they
are beneficiaries under a trust or a Will. Whether a property forms part of the
main asset pool to be divided will depend on the degree of control and interest
exercised by each party.
Similarly, joint liabilities must also be taken into account, including mortgages,
personal loans and credit card debts.
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Step 2: Is It “Just and Equitable” To Make An Adjustment
The Court must then consider whether it is “just and equitable” to intervene
and make any adjustment to the property division before assessing individual
contributions by the parties.
Step 3: Consider The Contribution of Each Party To The Relationship
Both financial and non-financial contributions made by each party will be
assessed by the Court. This includes contributions from the time of the start of
cohabitation through to after separation are recognised as follows:
1. Financial
Monetary contributions made during the relationship, including:
• Income and wages;
• Property acquired during the relationship;
• Assets owned at the start of the cohabitation;
• Gifts and prize winnings;
• In some cases, inheritances.
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2. Parent/Carer And Homemaker
Contributions to the welfare of the family are significant and can be seen as
equal compared to a party working fulltime. Examples include:
• Caring for children;
• Homemaking;
• Caring for elderly;
• Housework;
• Cleaning;
• General parental responsibilities;
• Grocery shopping and cooking.
3. Non-Financial
This category recognises that non-financial value can be contributed to the
• Renovation or landscaping work done to the family home or an
investment property;
• Unpaid work in a family business;
• Contributing to start up a business.
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Step 4: Identify The Future Needs of Each Party
After assessing the contributions of each party, the Court must have regard to
the current and future needs of each party to the relationship. The factors
which the Court considers are detailed in section 75{2} of the Family Law Act
which include:
• Age and state of health;
• Income and future earning capacity;
• Property and financial resources;
• Parental responsibility of children;
• Caretaking responsibilities;
• Duration of the marriage or relationship.
Step 5: Review Whether The Final Proposed Division Is “Just and Equitable”
In the final step, the Court will consider whether the proposed percentage
division and allocation of assets and liabilities is fair. In this step, the Court
may consider making an adjustment under section 75{2} of the Family Law Act
which may vary the final outcome.
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