Property Settlement

Understanding your expected range of entitlements

Separating couple would wonder whether it is an automatic 50/50 split of all assets and liabilities and quickly sign an agreement on that basis. The truth is that most of the time, it is not a 50/50 split. By signing an agreement, you potentially forego all your rights to claim the property in the future.

A good family lawyer will assess your case during your first appointment and give an estimated range of your entitlements so that you know your starting point when negotiating with your former partner.

If you have experienced a separation, it would be highly recommended that you speak to an experienced family lawyer to understand your expected range of entitlements.

The Four Steps in Family Law Property Settlements

It may be the first time you have heard the four steps for property settlements or you have seen the term so many times when you try to figure out your entitlements online. We understand your feeling. Let’s put the four steps as easy as possible for you.

Step 1: Determining the Property Pool

This is where we identify and value the net assets and everything that is available for division in your property settlement. 

The property pool will include the following:-

  • Real properties;

  • Motor vehicles;

  • Companies and Trust;

  • Money held as cash or in bank accounts;

  • Shares;

  • Superannuation;

  • Debts including mortgages, loans, credit cards and personal debts.

Your solicitor will prepare a Balance Sheet listing the assets, the debts and the financial rescources of you and your former partner.

If you and your former partner cannot agree on the value of any assets, a valuer can be appointed jointly to value the item.

If an asset has been disposed of or wasted before property settlement, it may be necessary to give this asset a notional amount and add back the value of this asset to the property pool. 

Step 2: Determing Contributions made by each party

We look at the contributions made by each party at various stages:-

  • At the commencement of the relationship/marriage, 

  • During the relationship/marriage, and 

  • After separation. 

The timing a contribution was made and its impact on the property pool is very relevant. 

We look at different types of contributions, such as:

  • Direct and indirect financial contributions made by the parties, such as monetary gifts given by one party’s parent, personal injury awards, income contribution;

  • Non-financial contributions made by the parties, such as improvements towards conditions of the family home; 

  • Contributions to the welfare of the family, including contributions in capacity of homemaker or parent.  

Every family is different. Contributions assessed on a case-by-case basis.

Step 3: Future Factors

Thirdly, we look at the impact that the relationship has had on the parties’ current circumstances. An adjustment will be made in favour of the spouse that requires more financial assistance to move on with their lives. These are commonly referred to as “future needs factors”.

We may take into account the following factors:

  • The parties’ ages and states of health in relation to each other;

  • The parties’ income earning capacity;

  • Any care arrangements for any children of the relationship under 18 years;

  • The parties’ standard of living enjoyed during the relationship;

  • Any education and training undertaken, or that which needs to be undertaken to re-enter the workforce;

  • The terms of the proposed orders to be made.

If one party has more future needs than the other party, we may give an adjustment to the person who has more future needs.

Step 4: Whether It is Just and Equitable to Divide the Property

Once we have decided on percentages, we use this step to determine how assets and liabilities are divided so that the division achieves a practical settleme for both parties.

We may consider whether one party should be given more superannuation than cash considering all circumstances.

We also consider whether both parties could live reasonably comfortably if a particular agreement is achieved and whether a slight adjustment is needed.

This is also called the “Justice and Equity” step.

Once the parties have reached a property settlement

There are two ways to document the agreement:-

  • Consent Order;

  • Binding Financial Agreement.