While there are many emotional issues which surround any relationship breakdown, financial issues are considered with a certain level of detachment. A property settlement is usually considered in a methodical way meaning that the court approaches property settlements with a certain level of predictability.
In Australia, we have a “no-fault” system of divorce and, therefore, the reasons for the separation are not usually relevant in property settlement matters.
Effectively, if the Court believes it is “just and equitable” to change the ownership of assets of the parties, the Court will use a four-step process to decide what is fair and equitable in each property settlement. Those four steps are set out below:
- To ascertain what the assets and liabilities of the parties are and to place appropriate values on those items;
- To look at the contributions of the parties to the relationship including direct and indirect financial contributions (money from work, inheritances, gifts etc), non-financial contributions (renovations or improvements to the value of assets carried out by the parties) as well as contributions as a homemaker or parent.
- To consider the future needs of each party going forward including the requirement to support themselves and any children and their capacity to earn income in the future to meet these costs.
- Finally, the Court will “step-back” and consider if the outcome of steps one to three look fair and equitable. If not, the Court can make further adjustments to come to a final decision.
After those four steps are properly considered, a property settlement acceptable to the court will be reached.
The four-step process in property settlements can be quite difficult to determine without seeking legal advice – particularly if you are not sure what the court considers as fair and equitable AND particularly if your emotions are clouding the issues. It is important to seek legal advice early on, to save pain and suffering later on. Our skilled lawyers are on hand to assist and advise with confidential no-obligation appointments readily available.
Download .pdf information sheet