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 the following four-step process:
1. Identifying and valuing the assets:
This includes all assets, liabilities, and superannuation in existence at the time that the agreement is reached or the property Orders are made. This can be tricky is parties have been separated for an extended period of time and the nature of the parties assets have changed since separation. For this reason, it is important to finalise property division soon after separation.
Accurate valuations are also important, particularly where parties are wishing to retain assets following the separation. We are able to asist you obtain business and real estate valuations, if necessary.
2. Assessing contributions:
A contribution in family law property matters refers to acts or efforts carried out by a party towards the acquisition, conservation or improvement of any of the property referred to in the asset pool. This covers both financial and non-financial contributions made by each party during the relationship.
A financial contributions includes such things as earnings, monetary gifts, and inheritances. While a non-financial contribution refers to the efforts and roles that a spouse or partner has contributed to a relationship that do not directly involve financial input and does not immediately present a financial reward. Non-financial contributions involve conducting renovations on the family home, homemaker duties and parenting contributions.
3. Considering future needs:
When considering property division, the Court makes adjustments to account for either parties greater future needs. When determining whether an adjustment for future needs is appropriate the Court may consider the age and health of the parties, the income earning capacity of the parties, whether either party is caring for a child of the relationship, and many other factors.
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 have been explored in this article.
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?
At Hanna Lawyers we encourage seperating couples and families to utilise low cost family dispute resolution services such as Uniting and Relationships Australia to attempt to reach an agreement. Where dispute resolution is not suitable or unsuccessful, or even when it results in an agreement being reached, a family lawyer can help negotiate terms of an agreement, formalise any agreement eached during mediation, and represent you in court, if necessary. Getting legal advice ensures you understand your rights and receive a fair share of the assets.
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. In the meantime, you cna find more information about family law property on our website.
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.
