When a marriage or a de facto relationship breaks down, the Family Court of Australia and Federal Circuit Court of Australia adopt the following steps to determine an appropriate property settlement:
- Step 1: The first step is to determine the asset pool available for distribution between the parties. This step involves identifying and valuing the assets, liabilities and financial resources of each party at the date of the hearing. In some circumstances, the Court can “add back” to the asset pool property that no longer exists.
- Step 2: The second step is to assess the parties’ respective contributions. This step involves considering the financial and non-financial contributions that each party has made to the acquisition, maintenance and/or improvement of the parties’ property, and to consider the contributions that each party has made to the welfare of the family. The Court will attribute a percentage of the asset pool to each of the parties based on their respective contributions.
- Step 3: The third step involves a consideration of the factors outlined at s 75(2) or s 70SF(3) of the Family Law Act (Cth) 1979. These factors are commonly referred to as future needs factors. After considering the parties’ future needs, the Court may decide to allocate to one of the parties an additional percentage of the asset pool or a particular sum.
- Step 4: The fourth and final step is to consider what Orders are just and equitable in the circumstances of the case.
It is strongly recommended that any settlement reached be made legally binding, and that you obtain legal advice in relation to your entitlements and options before finalising a property settlement by agreement or going to Court.
If you would like to discuss your family law matter, please contact our office to speak with one of our family lawyers on (03) 9311 8511.