How does the Court work out a property settlement?
When people separate, and were previously in a marriage or a de facto relationship one party usually wants ‘their fair share’. The following information provides an outline of how to divide a couples assets (property) and debts.
As a general rule – the maxim of ‘what’s yours is mine and mine is yours’ applies. That is if an asset (e.g. a property or bank account) or debt was in existence at the time of the parties living together it will be treated by the court as an asset or financial resource of the relationship, and the same applies for debts.
If there is an agreement to divide property and resources fairly several actions can be taken.
Each party may:
- formalise the agreement by entering into consent orders, which become orders of the Court
- formalise the agreement by entering into a financial agreement, which is essentially a contract between the two parties
- do nothing, keep things as they are and get on with the rest of your respective lives.
There are advantages and disadvantages to each approach.
However if either party cannot reach agreement, a party can apply to a court for financial orders, including orders relating to the division of property and payment of spouse or de facto partner maintenance. This essentially operates to being the matter to the attention of the Court were orders are made determining essentially who receives which asset and or debt.
De facto relationships and property settlements
The Family Court and the Federal Circuit Court can make orders in relation to financial matters following the breakdown of eligible de facto relationships that have broken down on or after 1 March 2009. There is no difference with respect to de facto relationship property settlements as the principles are essentially are the same once the de facto relationship has been established.
How the court determines the property settlements
The Family Law Act sets out the general principles that the Court considers when deciding financial disputes after the breakdown of a marriage or a de facto relationship.
These general principles are the same whether the parties were married or in a de facto relationship. The criteria generally follows the following process:
1. Working out how much the assets minus the debts are worth and determining the asset pool.
2. Taking into consideration financial contributions by each party to the marriage or de facto relationship such as wage and salary earnings.
3. Taking into consideration indirect financial contributions by each party such as gifts and inheritances from families.
4. Establishing the non-financial contributions to the marriage or de facto relationship such as caring for children and homemaking, and
5. Considering future requirements or needs – such as age, health, financial resources, care of children and ability to earn a living.
6. The Court will then adjust the settlement to try to balance out the competing needs of the parties according to need and fairness.
How much will I get?
Generally there is no set rule as to what is the right proportion between spouses or de facto couples who separate.
Judges will make a ruling on their understanding of your situation and the applicable law.
The decision is made after all the evidence is heard and the judicial officer decides what is just and equitable based on the unique facts of your case.
If you have been served an initiating application for property orders, seek legal advice and contact email@example.com on 9502 2922 to attend our office.