Areas of law
Property Settlements
People often come to us with pre-formed beliefs about how a A property settlement is an agreement made between two people to divide assets, liabilities and financial resources when a couple separates. A property settlement can be made with or without the court’s assistance. property settlement is worked out because they’ve received well-intended advice from family or friends, or they’ve heard something in the media or online.
However, just because something happened a particular way in one person’s property settlement doesn’t mean it will apply to you. For example, there is no starting point at a 50/50 settlement.
In reality, the court follows this four-step process to divide your assets, liabilities and superannuation:
Step 1
Identify all of the assets, liabilities and superannuation available for division between you both, regardless of whose name they are in. It also includes things such as interests in trusts and some inheritances.
Step 2
Identify the contributions each of you made at the start of your relationship, during your relationship, and after separation. Contributions fall into three main categories:
- Financial: income, gifts, and inheritances received
- Homemaker: day to day caring for the family and household duties such as cooking, cleaning, and washing
- Non-financial: house improvements such as renovations, or managing the financial affairs of the family
At the end of this step, a percentage rate is determined for dividing the assets, liabilities and superannuation.
It is very important that you know that when judges decide a case, the percentage is at their discretion. Almost every judge would arrive at a different percentage division.
Step 3
Identify whether you or your partner have any future needs. Things to consider are:
- your respective ages
- whether your income was affected by the relationship in a way that caused an income disparity between the two of you
- which partner will have predominate care of the children, and the need to protect the parent who wishes to continue their role as parent
- whether either of you have health issues that will impact your ability to earn an income
- the eligibility of either of you to access government payments
- the eligibility of either of you to access government payments
- the current financial circumstances of either person if they have re-partnered
At the end of this step, the percentage division may be reviewed to ensure each person’s future needs are considered. Each case depends entirely on its own facts.
Step 4
Determine whether the settlement is just and equitable in all of the circumstances.
This is where we stand back and look at the big picture of what each person will each receive and see how it sits. This is the sniff test, essentially. In this step it is not just percentages that are considered, but the actual dollar value the percentage outcome means.
Overall
Each property settlement depends entirely on its own facts. Getting confidential advice either before or after separation is important so that you know your property settlement rights and responsibilities.