In Australian family law, property settlements follow a four step process:
- Determining the property pool.
- Considering the contributions made by each person.
- Looking at the future needs of each person.
- Deciding whether it is just and equitable.
So you have a bit of an idea of what to expect as you look to separate your finances from your former partner, let’s start with an overview!
What is a property pool?
This is simply the combined assets and liabilities of the parties (in short). It includes any assets or debts which in the sole or joint names of the people involved, as well as anything in which they have an interest – like a company they might be involved in.
Most families have real estate, cars, savings, loans and credit card debts. If you are unsure, a lawyer can assist, or visit the Federal Circuit and Family Court of Australia website at fcfcoa.gov.au for more information.
What are ‘contributions’?
These are the contributions each of the members of the couple made to the relationship initially and throughout. This can be financial or non-financial, and can include things like income from work, inheritance and gifts, caring for children, or even giving up work to travel with a spouse to support their employment.
What are ‘future needs’?
Sometimes the law will consider the future needs of each party. This can include their future earning capacity, any health issues which may impact them, as well as care of children.
What do you mean by ‘just and equitable’?
Finally, we need to know that any division of property and finances is ‘just’ and ‘equitable’. The word ‘fair’ isn’t used because very rarely do people feel that an outcome is actually fair. Instead, we want to know that it did the matter justice and that it was equitable… which is kind of another word for fair. Just to confuse you.
Now, just to throw a spanner in the works, all of this is also considered in the context of the length of the relationship, but we will get to that later. For now, I hope this overview was helpful, and we will dive into the property pool next month!