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How does the law apply to a family law property settlement?

When parties make an application to court for a family law property settlement, the Court will, as far as possible, make such orders to finally determine the financial relationship between you and your partner and avoid further court proceedings.

The Family courts have a wide discretion when making Orders and will only make an order for a family law property settlement if the Orders are just and equitable.

Should there even be a family law property settlement at all?

In Family Law when considering a property settlement the first consideration is really whether it is just and equitable to adjust the property of the parties at all.

If this does seem appropriate it can be helpful to go through the following steps to try to reach an outcome.

Step One: Identifying and valuing the relationship property

You and your partner will have to identify and value ALL assets, liabilities, and financial resources that either of you have an interest in, as at the time of the property settlement. This includes property owned jointly, separately or with a third party.

Property that must be identified and valued includes not only, assets such as the house, cars and Superannuation, but also it may consist of a party’s entitlement to something in the future such as discretionary trusts and anticipated inheritances.

Each party must disclose to the other all relevant information and documentation. Failure to disclose may have serious consequences. Once all the property has been identified, it must then be valued. Values can be agreed between you and your ex partner or valuations can be obtained by an independent expert.

Step Two: Contributions made by each party

Once all the property is identified and valued, the court then assesses contributions made by each party during the relationship. This will include financial contributions, such as income earned, money spent on improving the home, as well as non-financial contributions, such as any homemaker or parenting contributions made by either party.

Contributions made by either party at the commencement of the relationship, during the marriage, or since separation will be considered by the court.

Step Three: Adjustments for Future Needs

The Court then considers whether there should be any adjustment to what either party is entitled to. In deciding any adjustment, the Court looks at a number of factors such as: each party’s age, earning potential, physical and mental capacity, and whether either party has the care of dependant children.

Step Four: Just and Equitable (back to the start)

Once all the factors have been considered the court will exercise its discretion to make an Order that is thinks is just and equitable, considering all the circumstances. This step ensures that justice is done to the parties. To do this, the court will consider the practical effect of the proposed orders and not just the percentage outcome.


Some further points to note

  • Property settlements following the breakdown of a relationship are as variable as the relationship. No two cases are ever quite the same.
  • Time limits apply to seeking a property settlement. The usual rule is that you have 12 months from divorce or 2 years from separation in de facto cases. Get legal advice about what these are for your case. If you let time run out, you may be prevented from applying for a property settlement.
  • There are alternatives to litigation that are widely used in Family Law including negotiation and mediation.
  • If you reach agreement you do not need to go to court in order to obtain court orders. These can be prepared and sent to the court and if the court agrees that they are just and equitable it will make ‘consent orders’.
  • An alternative to court orders is a Financial Agreement. These can be made at the outset of a relationship (‘pre-nups’), during or after separation. You must get legal advice before these can be made.