The Family Law Act 1975 (Cth) regulates matters relating to property division upon the separation of two parties. Most married or de facto partners procure assets such as real estate and motor vehicles throughout the time of their relationship. The aim of a property settlement is to finalise the financial aspect of the relationship and, therefore, each party’s financial situation will be considered including the assessment of both assets and liabilities.
Property Settlement Process
The two methods to conclude a property settlement are by way of a ‘consent order’ or ‘binding financial agreement’. When selecting the methods to finalize a property settlement, factors to consider include the duration of the relationship, the nature of the contributions made throughout the course of the relationship and factors affecting the welfare of the family. Therefore, it is important to seek advice regarding the best approach to attain the best settlement terms.
Value of the assets and liabilities
It is crucial to determine the property of the relationship. A list of assets and liabilities, commonly known as the “property pool” must first be identified. Although parties may have been separated for years, the value of an asset is not determined by the price paid on the asset during the relationship but by the current market value at the time of a Court hearing, negotiation or as agreed. Some examples of assets include real estate, cash in both joint and individual bank accounts, shares, superannuation, motor vehicles, household items, jewellery, capital gain on real estate and business or company assets. Whereas examples of debts include mortgages, loans, credit cards and personal debts.
Once the property pool has been identified, each parties’ contributions will impact the way the property pool is divided among the parties. The nature of contributions includes financial, non-financial, homemaker or parenting. For instance, salary, inheritances, gifts, housekeeping, childcare and maintenance. In an instance where a party is a homemaker and cared for the children, both financial and the homemaker contributions must be considered. There are often difficulties in determining and assessing inheritances or family gifts, loans from family or relatives and complex superannuation schemes.
Upon identifying and valuing the property between the parties as well as assessing the contributions of each party towards the property and the welfare of the family, other personal factors shall be accounted for as they may impact one’s future needs. Each party shall account for their age, state of health, income earning capacity and future financial resources, reasonable future living standard, parenting arrangements for children below the age of 18 as well as the current and future financial support of the children.
Separation can be difficult especially if it involves financial interest. If you would like to find out more about your options with regards to property settlement or division, Straits Lawyers are here to help. Simply send us an email at firstname.lastname@example.org or give us a call on 8410 9069 to arrange an appointment for an online interview.
Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.