Going through a relationship breakdown is never easy. Whether you were married or in a de facto relationship, working out who gets what can be one of the most challenging parts. The property settlement process in Australia aims to provide a fair and legal pathway for separating couples to divide their finances, property and responsibilities. Here’s a clear ten-step breakdown of how property settlement after divorce or separation usually works under Australian family law.
1. Identify all assets and liabilities
The first step in any family law property settlement is to figure out what’s actually in the asset pool. This includes everything owned by both you and your former partner – individually, jointly or through companies and trusts. Think bank accounts, the family home, superannuation, investment properties, shares, vehicles, business interests, financial resources, and even companion animals.
It also includes debts like mortgages, credit cards, and loans. You’ll both need to provide full and frank financial disclosure, including financial documents, bank statements and superannuation details.
2. Consider all financial and non-financial contributions
Property matters aren’t just about what you brought in or earned. Family law also recognises direct financial contributions (like income and savings), indirect financial contributions (like renovations or mortgage repayments), and non-financial contributions (such as caring for children or supporting a spouse’s earning capacity). All of this goes into determining a fair split.
3. Decide if anything needs to be valued
In many property settlement cases, certain assets like businesses, real estate or collectables will need a professional valuation. If either of you disputes the value of something significant, it’s best to agree on a single expert or arrange for independent valuations. This helps avoid later conflict in court proceedings.
4. Identify if any assets are hidden, missing or in dispute
Financial disclosure is required under the Family Law Act, but unfortunately, not everyone is upfront. If you suspect your ex-partner is hiding assets or undervaluing their interests, an experienced family lawyer can help investigate. In some cases, forensic accountants may be needed to track down money paid into other accounts or identify hidden business dealings.
5. Calculate the total asset pool
Once everything is on the table and valued, you’ll have a clearer picture of the overall property pool. This is the foundation for negotiations or court decisions.
6. Consider future needs
The Federal Circuit and Family Court of Australia take future needs into account when deciding on a fair division. These include your age and health, parenting arrangements, your own income and earning capacity, whether you’re receiving an income-tested pension or government benefits, and whether you’re required to financially support children. This can also include spousal maintenance or de facto maintenance in some situations.
7. Discuss and explore how things might be split
Now that you’ve got all the data, the next step is to work out whether you and your former spouse or de facto partner can agree on a fair division. Some couples manage to create an informal agreement, while others go through dispute resolution or family dispute resolution services. It’s important to remain realistic and consider what a court would view as fair.
It’s also necessary to consider legal costs, matters like child support if required, and also living costs for both parties while the property settlement process is finalised.
8. If you can agree, formalise it – after having independent legal advice
If you both reach an agreement, you can formalise it with a Binding Financial Agreement or submit consent orders to the court. Either option has legal weight, but consent orders are reviewed by a registrar with the aim of ensuring the proposed split is fair. Getting independent legal advice is recommended before signing anything, especially if the agreement involves significant property or financial support. It’s essential to do this because what may seem fair to both parties may not take into account the whole picture.
9. If you can’t agree, seek legal advice or mediation
If you and your ex-partner can’t agree, it may be time to get further legal advice and explore family law dispute resolution options to help you to reach agreement. A qualified family lawyer can help you negotiate a better outcome or advise you on whether to commence court proceedings. Mediation may still be an option before going to court, but in some cases involving family violence or other exceptional circumstances, the court is the only viable path.
10. Finalise your settlement legally
The final step in the property settlement process is to put everything into action. This includes property or title transfers, superannuation splitting, paying out debts, and making sure any financial or property orders are properly executed. The court may issue financial settlement or property orders, depending on your circumstances. Remember, time limits apply: married couples have 12 months from the date of divorce, while de facto couples have two years from the date of separation to commence court proceedings.
Need assistance with property settlement after divorce?
Property proceedings in the family court or federal circuit court can be complex, costly and emotionally draining. That’s why it’s always wise to get legal advice early and stay focused on resolution rather than conflict.
Understanding your rights and obligations under family law property settlement can help you take control of your financial future and move forward with clarity. Get in touch with Avokah Legal today for advice on how to finalise your financial relationship after separation.
