Property settlement- principles according to the Family Law Act
Separated couples can reach a property settlement inside or outside of court depending on the circumstances.
Outside of the court room property can be divided in any number of different ways. If a couple can come to an agreement about their property adjustment after separation, your solicitor can then help you to draft up the agreement into consent orders. Once lodged with the court this agreement is as legally binding as a Court Order.
If however, a separated couple is unable to come to an agreement, either party can make an application to the court for a property settlement.
When considering property adjustments, the court is given a very wide discretion to determine a property settlement which is ‘just and equitable’ to all involved parties.
The court will apply a 4-stage process to determine a just and equitable property adjustment.
Stage 1: The court must first determine the size and nature of the property pool. The property pool includes the couples assets, liabilities and superannuation in both individual and joint names. Both parties will be obliged to provide disclosure of their assets to the court and the other party. Depending on the size of superannuation involved, a couple’s superannuation may be placed into a separate asset pool.
Stage 2: The court will then look to both parties contributions to the relationship and family. Both financial and non-financial contributions are included. So if one couple has worked full time and one has cared for the children the nature of both contributions will be considered.
Stage 3: The court then looks to the future needs of both parties. A person’s future needs include their age, health and earning capacity after separation. The needs involved in caring for children after separation are also considered. This is where the court will discuss if spousal maintenance, child support or a one off future needs payment is required.
Stage 4: Finally after considering the above three stages, the court must determine what would be a just and equitable property settlement.
Under the Family Law Act, the Court will determine a property adjustment based on a percentage adjustment (for example 45/55). Your lawyer will provide you with a percentage range based on their estimate of what the court will award.
If along the way you and your former partner come to an agreement about a property settlement you can lodge consent Orders with the court at any time during the litigation process.
At FGD we are passionate about keeping you in control of your own property settlement. After meeting with you for an initial appointment, we can begin to discuss a property settlement plan which focusses on you and your needs.