If you re married, the division of your property between you and your spouse is covered by the Family Law Act. It does not apply to defacto relationships unless defacto couples have separated on or after the 1 March 2009.
The property available for distribution is “the property of the parties to the marriage or either of them”. Accordingly, the property is not just limited to property in your joint names, but also that is in your name only or your spouses. This may also include any interest in Family Trusts or assets that may be in a third party’s name.
In determining an application for the division of property the Court adopts a four step process:
Step 1 – Identifying and valuing the parties’ assets, liabilities and financial resources. This steps involves identifying all property in you or your spouse’s name. This includes all superannuation entitlements either you or your spouse may have.
It often requires obtaining market appraisals or formal valuations of Real Estate, or formal valuations of any business that you and/or your spouse own. Sometimes Trusts need also to be valued and expert accountancy advice obtained.
Step 2 – Assessing respective financial and non-financial contributions. This involves the Court looking at what financial contributions have been made by each of the parties to current assets. This requires an assessment of:
- Any initial contributions made at the commencement of the relationship.
- Any lump sum contributions made during the marriage, such as any inheritances, worker’s compensation claims, gifts from parents or other family members, redundancies and income received from employment or other sources.
- Any contributions made after separation including non-financial contributions as homemaker and parent or to the maintenance of any assets that are owned. Sometimes the Court needs to take into account whether one party or the other has made any special contributions which have enabled you to acquire an asset in a way that you may not otherwise have been able to, or also where one party had deliberately or recklessly behaved in such a way to cause a loss.
Step 3 – Assess parties’ future needs. In this step, the Court has to take into consideration such things as:
- Income, property and financial resources of both parties.
- Your respective age and health.
- Whether or not you have the primary care of any children under 18.
- Whether one or more of the parties is in a relationship that is assisting them meet their financial needs.
The Court, after considering these issues, can make a further adjustment in favour of one of the parties if it is appropriate to do so.
Step 4 – The outcome must be just and equitable. In this step the Court has to ensure that the Orders that it proposes is just and equitable. After the Court has considered all matters under the first three steps referred to above, in determining the property settlement, the over-riding consideration then is that the Court cannot make an order unless it is satisfied that in all the circumstances it is just and equitable to do so.
This does not mean that the Court then reassesses the earlier three steps but:
- Looks at the findings under the first three steps.
- Looks t the effects as to the determinations as to contributions and future needs factors.
- Resolves what order is just and equitable in all the circumstances of the case.
This more often than not has the effect in the Court deciding for example whether or not your home needs to be sold or whether your spouse can retain it to pay to you any adjustment that may be necessary for you to achieve your proper entitlement.