When your de facto relationship ends or you are going through a separation, it can be overwhelming to think about practical matters – like dividing assets, such as property, or reaching an agreement on financial support. Seeking legal advice early from an experienced separation lawyer can help protect your legal rights and give you the best chance of a fair, stress-free resolution.
To help you get started, we’ve created a guide to dividing your assets in a divorce, covering everything from filing for divorce to binding financial agreements and division of assets.
How are assets divided during a separation or divorce?
Under Australian law, there is no single formula for dividing property or financial resources in a separation or divorce. Instead, a judicial officer will consider all the evidence and examine individual circumstances to determine property adjustment and financial or property orders.
Step 1: Identifying and valuing all the property
The first step involves compiling the asset pool. This includes all the assets, such as the family home, superannuation benefits, vehicles, shares, investments, personal debts, and any companion animals or family pets that may require care arrangements. Financial documents and evidence of direct financial contributions and indirect financial contributions by each party are also reviewed.
Step 2: Considering contributions
The court considers financial contributions, such as salary and direct investment in the family home, and non-financial contributions, like caring for children, managing household responsibilities, or supporting a de facto partner during the relationship. Even if one party did not earn income, their contribution to family life or the property may be significant.
Step 3: Assessing future needs
The family court will then consider future needs. This stage takes into account factors like age, health, earning capacity, the care of children, superannuation entitlements, and the economic effect of the separation on both parties. Financial support, child support, and financial or property orders may be adjusted to protect the parties’ future.
Step 4: Ensuring a fair split
Finally, the court considers whether the division of property and assets will result in a fair share for both parties. This is not automatically 50/50. Sometimes the settlement favours the financially weaker party, for example, a 70/30 split, to reflect the contributions and future needs of both parties.
Resolving your settlement outside of court
It is usually preferable to resolve financial arrangements without going to court. Early discussions between parties can help reach agreement and avoid lengthy legal processes. Covering topics like dividing property, care of family pets, financial support, and personal debts in a written or informal agreement ensures expectations are clear.
Binding financial agreements
A binding financial agreement is a legally enforceable document under the Family Law Act that sets out how all the property and financial resources are divided. These agreements can be prepared during or after a relationship ends and provide certainty for separating couples. Seeking independent legal advice before signing is essential to ensure the agreement is valid.
Consent orders
Consent orders are another option for formalising property and financial arrangements. Made through the family court, these orders record agreements regarding property division, spousal maintenance, and financial or property orders. Consent orders are quick, affordable and enforceable, providing certainty for both parties and protecting legal rights.
Dividing assets in a separation through the family law courts
If the parties cannot reach an agreement, litigation in the Federal Circuit and Family Court of Australia may be necessary. The court considers all contributions, both financial and non-financial, future needs, the earning capacity of both parties, and family violence considerations.
They court can make property orders, split superannuation benefits, or make financial orders for child support or spousal maintenance with your former partner, depending on your financial circumstances.
Going to court can be stressful, expensive and time-consuming, so it is generally the last resort. The judicial officer decides the outcome based on all the evidence and aims to provide a fair split for the parties involved. In many cases, it’s possible to start negotiating with your ex-partner if you are amicable, or with the assistance of an experienced family lawyer. Mediation or dispute resolution should always be considering before beginning court proceedings with the other party.
This can significantly save both parties legal fees, and there is a good chance that the outcome will be in the best interests of both parties. A family lawyer can assist with protecting your interests during the mediation process.
Need help dividing assets in a separation? Book a complimentary consultation
If your de facto relationship ends or your marriage is concluding, our team at Testart Family Lawyers can guide you through the entire legal process, helping you understand your options for property adjustment, binding financial agreements or court litigation.
Contact us today to seek legal advice, protect your legal rights, and take the first step toward a fair share of dividing assets during your separation or divorce.
