Dividing what you built together
When a relationship ends, the financial ties that connected two lives must be properly separated. That process is a property settlement, and it applies equally to married couples and de facto partners, including same-sex couples.
A property settlement is not simply splitting everything down the middle. The Family Law Act 1975 requires the court to reach an outcome that is just and equitable in all the circumstances, taking into account what each person contributed and what each person will need going forward.
Getting this right matters. An informal arrangement, or no arrangement at all, can leave you exposed long after the relationship has ended.
What property settlement covers
Property has a broad definition under family law. It includes assets and liabilities brought into the relationship, acquired during it, and received as gifts or inheritance. Specifically, the court can consider:
- Real estate, including the family home
- Superannuation entitlements
- Bank accounts, savings, and investments
- Vehicles, businesses, and business interests
- Family trusts, in some circumstances
- Debts and liabilities of either party
Superannuation is treated separately under family law and can be divided between parties through a superannuation splitting order. This is an area where family law and estate planning intersect directly. Our team advises on both.
How the court approaches property settlement
The Family Law Act 1975 sets out a four-step framework that guides how property settlements are assessed, whether reached by agreement or determined by a judge.
Step one: identify the asset pool
All assets and liabilities of both parties are identified and valued. This includes superannuation, business interests, and any property held in trust structures where a party has a beneficial interest.
Step two: assess contributions
The court considers direct financial contributions such as income and savings, indirect financial contributions such as gifts and inheritances, direct non-financial contributions such as renovations, and contributions to the welfare of the family including homemaking and parenting.
Step three: assess future needs
The court looks at the future circumstances of each party, including age, health, earning capacity, care of children, and any significant disparity in financial resources. A party who has primary care of young children, or who has significantly reduced earning capacity as a result of the relationship, may receive a greater proportion of the asset pool.
Step four: just and equitable outcome
The court considers whether the proposed division is fair in all the circumstances. This is not a mechanical calculation. It is a judgment that takes into account everything relevant to the particular parties and their particular situation.
How property settlements are reached
By agreement
Some couples are able to reach agreement directly, particularly where communication remains respectful and both parties have a clear picture of the asset pool. Any agreement reached should always be formalised, either through Consent Orders filed in the Federal Circuit and Family Court of Australia, or through a Binding Financial Agreement. An informal agreement is not legally enforceable.
Through negotiation
Where direct agreement is not possible, negotiation through lawyers is often the most effective path. Knowing where you stand legally gives you the clarity to negotiate from a position of understanding rather than uncertainty. Mediation with a family dispute resolution practitioner is also available and can assist parties to reach a resolution without court involvement.
Through the court
Where negotiation fails, an application to the Federal Circuit and Family Court of Australia is the available option. A judge will consider the evidence and make orders determining the division of property. Court proceedings are the most costly and time-consuming path, and most matters resolve through negotiation before reaching trial.
Once a divorce is granted, you have twelve months to lodge a court application for property settlement. De facto partners have two years from the date of separation. Do not let these deadlines pass without taking advice.
Property settlement and your estate plan
Separation is one of the most common triggers for an estate plan review, and one of the most commonly missed. Your Will, your Enduring Power of Attorney, and your superannuation nominations may all still name your former partner. Separation alone does not change any of them.
Our team sees family law and estate planning as connected, not separate. A property settlement conversation with us will always include a check on whether your estate planning documents need to change at the same time.
We are here to help
We understand that the end of a relationship is difficult. Our role is to give you clarity about your position, protect your interests, and help you reach a resolution that lets you move forward.
Book a conversation with our team. No obligation. No pressure. Just a clear picture of where you stand and what needs to change.