Property Settlement

Either party to a property dispute may apply to the Family Court of Australia or the Federal Magistrates Court of Australia seeking Orders for property division. The Family Law Act 1975 sets a time restriction of 12 months from the date of the final Divorce Order within which either party may apply to the Court seeking property division and/or spouse maintenance Orders.

The Family Law Rules 2004 require the parties to make a genuine attempt to reach agreement as to a property settlement in division of the matrimonial pool of assets, resources and liabilities. Pursuant to the Rules, the parties are also required to exchange all relevant information and documentation in an attempt to reach an informed agreement before the commencement of Court proceedings.

In assessing an appropriate property settlement, the Court will firstly ascertain the net asset pool. The general rule is that all assets must be taken into account, whether they are acquired before or during marriage, or after separation.

Property includes the assets of either or both of the parties such as real estate, cars, shares, savings, furniture, jewellery and personal effects. Superannuation interests are treated similarly by the Court. The Court also has the power to consider the financial resources of each party, including funds or assets over which a party has influence or control or, in certain circumstances, prospective entitlements.

In ascertaining the net value of the matrimonial assets, the Court will take into consideration issues such as valuation of certain items, taxation implications (including capital gains tax), stamp duty, and other relevant issues.

The next step is for the Court to assess each party’s financial and non-financial contributions towards the relationship, including the performance of the role of parent and/or homemaker.

The initial contributions of each party as at the date of commencement of cohabitation or the date of marriage will also be a relevant consideration for the Court. Further, gifts and inheritances and other such acquired funds during the marriage will be of significance.

The next step is for the Court to consider and assess the future needs of each party to the relationship, taking into account such issues as each party’s age, health, income earning capacity, whether the party has to care or support children, and the financial circumstances of any new relationship formed. Once these issues have been assessed and given appropriate weight by the Court, the Court may provide an adjustment to its contributions based assessment in favour of one party or the other.

In each circumstance, the Court will attempt to achieve a result which is just and equitable in any proposed property settlement. In reaching this assessment, the Court will give consideration to incorporating an appropriate blend of the immediately available assets and also the deferred but important benefits (such as superannuation).

If the parties to a property division are able to reach an agreement outside of Court, there are two ways of formalising such agreement. Firstly, the parties can enter into Consent Orders and have the same registered with the Family Court of Australia or the Federal Magistrates Court of Australia in confirmation of the property division achieved. Secondly, the parties may enter into a binding Financial Agreement detailing the division of all matrimonial assets, resources and liabilities.

In certain circumstances, one party may have an obligation to provide ongoing spouse maintenance to their former partner. In other words, one party may be liable to pay ongoing support to their former spouse if their former spouse is unable to adequately support him or herself so that their reasonable needs are met, and the other party has the capacity to do so.

For further information on issues concerning property settlement and/or spouse maintenance, please do not hesitate to contact our Family Law Department.
 
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