When determining how property should be divided after separation, the following four (4) step approach should be applied after first determining that there should be an adjustment of property rather than each party retaining the property they currently hold:
- Determine the pool of assets, liabilities and financial resources at the time of reaching agreement (i.e. the pool is not determined as at the date of separation) or at the time of the hearing if your matter is being determined by the Court. All property is included in the asset pool regardless of whose name the property is held in or when the property was acquired. Superannuation is treated as property.
- Determine the contributions that each party has made to the acquisition, conservation and improvement of the property. The contributions can be direct and indirect (for example, gifts and inheritances) and financial and non-financial (for example, the care of children). The contributions made by each party, at the commencement of the relationship, during the relationship and since separation, will be taken into account.
- Assess the future means and needs of the parties having regard to a number of issues set out in Section 75(2) of the Family Law Act including income and earning capacity, property and resources, superannuation entitlements, health issues and the need for one party to care for the children of the marriage. An assessment of entitlement to the property in percentage terms can then be made based on contributions and future means and needs of the parties.
- The Court has an overriding discretion to make an Order for property settlement which is just and equitable and will make any further adjustments to achieve a just and equitable distribution of property.
This four step approach is also applied by the Court when determining property settlement applications in matters where parties cannot reach an agreement between themselves. This approach is applied by the Court even when making Consent Orders (Orders which are agreed to by both parties) as the Court still needs to ensure that they are just and equitable.
If you are divorced you only have twelve (12) months from the date the Divorce Order comes into effect to apply for property settlement. If you were in a de facto relationship you only have two (2) years from the date of separation to apply for property settlement. Alternatively if you are wanting to apply for a property settlement after these limitation periods you first need the permission of the Court. There is no guarantee that the Court will grant this permission. See our section under Divorce for more information.
If you would like more information in relation to property settlement matters please do not hesitate to contact us to arrange an initial consultation.