When most clients come to us they tell us they just want a “fair” property settlement.
Whilst you may use the word “fair”, the Family Law Act 1975 (Cth) uses the phrase “just and equitable”.
In order to determine a just and equitable property settlement a 5 step process is applied:
1. Determine the asset pool to be divided. What are all the assets, liabilities, superannuation and financial resources of the separating couple as at today?
- TIP – an interest in a business, trust, or company may form part of the asset pool
- TIP – an asset not in joint names still forms part the asset pool
- TIP – inheritances form part of the pool
- TIP – formal expert valuations may be necessary (e.g. homes, investment properties and businesses)
2. Determine whether it is just and equitable for a property settlement
- TIP – the answer to this question is almost always yes
3. Assess the contributions each of the parties made as follows:
- financial contributions;
- non-financial contributions; and
- parenting and homemaker contributions
- TIP – it is particularly important to identify any inheritances, gifts and windfalls
- TIP – there is no hierarchy of the different types of contributions
4. Assess what adjustment should be made on account of future factors such as:
- the age and state of health of each of the parties;
- the income, property and financial resources of each of the parties and their capacity for employment;
- care arrangements for the children;
- the commitments of each of the parties that are necessary to enable the party to support himself or herself and a child or another person he/she has a duty to maintain;
- a standard of living that in all the circumstances is reasonable;
- the duration of the marriage and the extent to which it has affected a party’s earning capacity;
- the need to protect a party who wishes to continue that party’s role as a parent;
- any child support that a party to the marriage has provided, is to provide, or might be liable to provide in the future, for a child of the marriage; and
- any other relevant factor or circumstances
- TIP – this list is not exhaustive and it is imperative that you maximise your future needs percentage adjustment to achieve your best property settlement outcome
5. Make any necessary adjustment to the final percentage split to ensure an appropriate result.
- TIP – Every case is different: there is no ‘one size fits all approach’ and there is no 50%/50% starting point.
If you have questions about what your property settlement entitlement is, call or email us today.