Categories: The Family Lawyer Education Center649 words2.5 min read

In Australia how are assets divided in separation?

About the Author: Kristdel Bolog

Kristdel practices solely in Family Law has been a Partner at The Family Lawyer since June 2019. Aside from her amazing ability to recite from memory the entire “Ode to Spot” by Commander Data, she has a wealth of knowledge and practical experience from a decade in the field of family law. Kristdel’s passion for the law and a love of helping people through difficult times enables her to put peoples minds at ease, even during complicated or bitter family court proceedings. As our resident “empath” she is The Family Lawyers’ Counsellor and is always there to listen to her colleagues or clients and bring a smile to their faces. Her nickname around the office is “the nerd”, a badge she wears proudly. Kristdel is hardworking, knowledgeable and dedicated to getting great outcomes for her clients. You can contact her at kbolog@thefamilylawyer.com.au or on 03 8657 3751.
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October 4, 2021

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Separating from a relationship can be a stressful time in your life and there are many things to consider and work out between the parties to the relationship. At The Family Lawyer, we are here to help you understand the key terms and provide you with advice to navigate this difficult time.

Firstly, the terms property settlement and divorce are often used interchangeably, but they do have different meanings. If you are getting a divorce, this is the end of the marriage between two parties. Divorce does not involve the dividing assets of the relationship. Whereas property settlement is where the couple divides their assets upon separation.

What are the assets and liabilities of the relationship?

Assets or liabilities are owned jointly or individually by the parties, this may include: the family home; cash; bank accounts; jewellery; vehicles; superannuation; businesses; debts (including credit cards, loans, mortgages, and personal debts); and inheritances. These assets and liabilities are often referred to as property, this includes what is accumulated during the relationship and in some circumstances, what was accumulated prior and after the relationship. Some property may be excluded such as gifts or insurance payments, but this is highly dependent on the circumstances. All of these assets and liabilities will form what is called the property pool. It is important you speak to The Family Lawyer for separation and family law advice today to assess the property pool.

How are assets divided?

Unfortunately, there is no simple calculator to say how the property pool should be divided. It is also very dependent on the circumstances of the relationship, for example whether it was a long or short relationship, what was brought into the relationship and any other needs of the parties.

Under the Family Law Act, property is to be divided in a just and equitable manner, which is calculated in a four-step process.

property division upon separation in Melbourne

Step 1: Value of the assets and liabilities

The first consideration is identifying all the assets and liabilities of the relationship such as the value of the real estate, cars, shares, and any liabilities such as the mortgage or credit card. We look at their current value and put together the property pool.

If a value of an item cannot be agreed, it can be valued by an independent valuer. This figure will then be used in the property pool.

Step 2: Assessing the financial and non-financial contributions 

After we have established the property pool, the Court then looks at the financial and non-financial contributions of both parties. Non-financial can include a physical renovation of a home or caregiver and homemaker to the family unit. Financial contributions are typically employment income or any other indirect income.

Inheritances, gifts, or redundancies can also be considered property as part of the pool or a financial resource of one or both of the parties.

Step 3: Future needs and adjustments 

The court then considers the parties potential future needs and whether either party should receive an adjustment in their favour. Future needs is about considering the earning capacity of each party, any health issues, care of children, and the financial resources the parties have available to them. Every case is different and the adjustment which may be made is dependent on the circumstances.

Step 4: Is the outcome just and equitable 

Finally, when considering the division of property of the relationship, the court assesses whether it was ultimately fair and equitable considering all the circumstances. Every case is different and will be decided based on the merits and circumstances of your case.

It is important to seek advice about the circumstances of your case and the likely outcome.  At the Family Lawyer we are here to help you understand what a property settlement may be and how we can resolve your matter as efficiently as possible. Contact us today for a free case assessment and to greater understand your property settlement and proposed property division.

How can we help?

If you need legal advice or support, our experienced and compassionate family lawyers can assist you, whatever stage you may be at. Talk to us today for a FREE 15-minute family law consultation by calling 03 8657 3751 or via email at enquiries@thefamilylawyer.com.au we look forward to helping you achieve a better outcome.

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