Deciding to divorce your spouse was likely a painstaking process and now you have to face the divorce property settlement process. Property division is all part of the process and it’s essential, but it’s often complicated by complicated or bitter feelings about the breakup. Sadly, many partners take a revenge approach rather than setting their emotions aside to do things fairly. Ultimately, Australian law requires this process to be fair and equitable. That doesn’t necessarily mean a 50/50 split because everyone’s circumstances are different and that’s where the confusion comes in. 

How Property Division Works in Australia

Under the Family Law Act 1975, a property settlement after separation should be agreed between the divorcing parties, whether it’s an amicable agreement between lawyers and mediation or it ends up in court. The best case is that you can settle it between adults without court intercession. 

If you can’t agree, the court will be left to make the final decision on how to divide the property pool. Not only is this time-consuming and costly, but the court will consider income, the potential for earnings, who contributed to what, and make a fair and equitable decision you might dislike.

You don’t need to wait for the divorce to be settled, you can complete the Property Settlement Process as soon as possible. Likewise, if you were not married but have de facto status, you can complete the property settlement process any time following your separation. 

The Four-Step Property Division Process

There is a four-step property division process in Australia as outlined in the Family Law Act 1975. 

1. Identification & Valuing

Both parties must disclose all financials, including assets and liabilities. Disclosures must then be valued, including savings, investments, business ownerships or partnerships, superannuation, and real estate. 

2. Contribution Assessment

The court will assess each party’s financial contributions to the relationship, but the court also looks at the non-financial contributions. Contributions include caregiving duties and homemaking as equally as income. 

3. Future Needs

The court will consider age, income, health, and whether there are children in the relationship when assessing the future needs of each party. This is where the fair and equitable part comes in. For example, someone who gave up their career to be a stay-at-home parent and homemaker will have a harder time commanding the earnings of someone who has been in the workforce for that length of time. 

4. A Fair, Equitable Outcome

The court will make a fair and equitable distribution of assets based on the information above. 

The Influencing Factors 

Many factors influence the court’s decision, which is why it’s so important to achieve your desired outcome through mediation rather than going to court. 

  • The court will consider the duration of the relationship; the longer the marriage is, the closer to a 50/50 split of assets you’re likely to see.
  • The court will assess the financial and non-financial contributions and the future needs of each party, including earning capacity, health, age, and any other circumstances that may affect one party.
  • The court will assess each party’s financial resources and earning potential. 

What’s the Difference Between Fair and Equal 

When people talk about an equal division, they think of it as a 50/50 split and that would be literally equal division. However, the court process is about fairness and equity rather than equality. Fairly dividing the property pool means dividing it based on the contributing factors. With family law property settlements, the court’s goal is fairness rather than equality. Accordingly, a fair settlement often means one person receives a larger portion of the property pool. 

What Options Are Available 

The best approach to property settlement is mediation. Not only is it quicker, but it’s less adversarial and less expensive as compared to court. Both parties have a say and there is far more control over the outcome. 

In amicable breakups, many couples can handle the property settlement process with direct negotiations and some lawyer input. Whereas, collaborative law involves lawyers in the process from the start, but avoids court. 

Once you agree, you can formalise it under the law by having the court approve a consent order to make it legally binding. 

The Complex Assets

There are complex assets that muddy the waters and many times, these are the issues that land you in court. Superannuation is a considered property pool and the division of this can be complicated so beware. If there are businesses in the frame, this may require more detailed financial analysis and an expert may be required to handle the valuation. Inherited assets are another complex asset and ultimately, the court would determine this division by how that inheritance was used during the relationship.

What to Avoid 

Always be honest in your financial disclosures; trying to hide things will only complicate matters further.

While there are property settlement time limits, you don’t need to rush the agreement to get it over with. This process shapes your future financial health, so your needs must be considered properly. Even if your breakup was amicable, always enlist the services of a family lawyer to handle the legal aspect of the divorce and property settlement. 

Seek Legal Advice: Call AJB Stevens

The goal of property settlement is to ensure your property pool is divided fairly and the best way to ensure you get your share is to seek wise legal counsel. A reliable family lawyer will dispense expert advice, assist you while you navigate your divorce, and fight for you to get your fair share. At AJB Stevens, we are experienced in navigating the family court system and will always represent your best interests. Get in touch today to schedule your free consultation.