Foundations series: Understanding Property Settlements in Family Law

What is a Property Settlement?

A property settlement is the formal division of property and financial resources between two parties following the breakdown of their relationship, whether they were married or in a de facto relationship. Property includes:

• Real estate (homes, investment properties)
• Superannuation
• Bank accounts
• Investments and businesses
• Debts (loans, credit cards, mortgages)
  

How are Property Settlements Determined?

In Australia family law property settlements are guided by the principles set out in the Family Law Act

1975 (Cth). The law aims to ensure that property is divided in a way that is just and equitable, and this is

done through a four-step process:

1. Identifying and valuing the assets: This includes all assets, liabilities, and superannuation. Accurate valuations are critical.
2. Assessing contributions: This covers both financial and non-financial contributions made by each party during the relationship.
3. Considering future needs: The court takes into account factors like age, health, financial resources, and caregiving responsibilities
4. Reaching a just and equitable outcome: Based on the above factors, the court determines a fair division of assets, which may not necessarily be an equal division but one that reflects fairness.

A property settlement is about dividing assets and debts fairly, not necessarily equally. There is no automatic 50/50 split—the court considers various factors, some of which are discussed below.

Factors that may influence family law property settlements

When a relationship ends, dividing assets can be one of the most challenging aspects of separation or divorce. In Australia, property settlement is governed by the Family Law Act 1975(Cth), ensuring a fair and equitable division of property, assets, and debts.

If you are wondering “Who gets what in a divorce?”, this article covers the basics of property settlement in family law, including how assets are divided, the property settlement process, and your legal rights.

Is there a time limit for bringing a family law property settlement?

Yes, if you are unable to settle without the Courts assistance, then you must file your family law property settlement in Court within:

• 12 months after divorce (for married couples)
• 2 years after separation (for de facto couples)

You may commence a claim for family law property settlement any time after separation (and before your Divorce is granted).

The following factors can influence the court’s approach to property settlements:

• Length of the relationship: Longer relationships may result in a more equal distribution of assets, due to the weight of any initial contributions eroding over time.
• Care of children: The party primarily responsible for the care of children may receive an adjustment in their favour due to the need to support dependents.
• Health and age of the parties: The court may adjust settlements to reflect any disparities in health or age, particularly if one party has a greater need for financial support
• Financial resources and earning capacities: Differences in income potential and financial resources between the parties can influence the division.

Do I have to go to Court for a family law property settlement?

No, most property settlements are resolved through negotiation, mediation, or agreements. The options include:

• Informal Agreement – A private arrangement between parties (not legally binding)
• Binding Financial Agreement (BFA) – A legally enforceable contract
• Consent Orders – A formal agreement approved by the Family Court
• Court Proceedings – If an agreement can’t be reached, the court will decide based on fairness

It is always our preference at Hanna Lawyers to settle a matter out of Court, where it is appropriate to do so.

Do I need a lawyer for family law property settlement?

While not mandatory, getting legal advice ensures you understand your rights and receive a fair share of the assets. A family lawyer can help negotiate, draft agreements, and represent you in court, if necessary.

If you are facing separation and need expert family law advice, contact a Hanna Lawyers for assistance from a qualified family lawyer to guide you through the property settlement process.

Disclaimer: This article is for general informational purposes only and should not be considered legal advice. If you’re dealing with a property settlement, it’s recommended that you seek advice from a qualified lawyer to understand your specific circumstances.