Separated or thinking about Separation?
What happens to my assets?
The method of working out what is a “just and equitable” property settlement is set out in the Family Law Act 1975.
This Act gives the Court a wide discretion to determine what is fair in the circumstances.
If you have a Financial Agreement
If you have a Financial Agreement then you have to divide your assets, liabilities and superannuation in accordance with the Agreement. The Agreement should also set out what steps you each need to take to put it into effect.
If you don’t have a Financial Agreement
The Family Law Act governs the division of assets, liabilities and superannuation. There is a standard 4-stage process applied by the Courts and lawyers to determine what each party’s rights and entitlements are under that Act. In Family Law, we deal in percentages. This means that the advice that we give you will be what percentage of the assets you can expect to receive.
Of course, if you and your partner can reach agreement, you can divide your assets regardless of the percentage …
When the Family Court is required to make a determination of the respective entitlements of the parties it conducts a four stage inquiry:
Firstly, it looks at the extent of the assets of the parties. This involves an analysis of the various assets and the debts associated with them. The parties are obliged to provide to the Court valuations of the relevant assets. Sometimes this is very straightforward but sometimes when family trusts and/or companies and partnerships are involved, the identification and valuation of assets can be a complex matter.
The second stage of the process is for the Court to determine the proportions in which the parties can be said to have “contributed” to the acquisition, conservation and improvement of their assets and how they have contributed to the welfare of the family.
The third stage requires the Court to look at the “future needs” of the parties – that is, the Court considers whether any adjustment should be made to the shares to which the parties are entitled by reason of their “contributions” because of certain matters. Those matters are set out in the Family Law Act and are quite extensive.
The fourth stage allows the court to identify what factors need to be taken into account to result in a “just and equitable” property settlement to the parties.