Divorce and Property Settlements in Australia: Who Gets What?

Separation and Divorce is an exceptionally troubling time for families. Family Law is a complex area of law and determining who gets what following the breakdown of a relationship is an equally complex matter.

The legal process can face extensive unnecessary elongations from either party or inadequate legal support. As North Queensland’s leading team of family lawyers, wilson/ryan/grose are here to explain how assets are divided following the breakdown of a relationship in Australia.

How Are Assets Divided Follow the Breakdown of a Relationship in Australia?

Any discussion surrounding the division of assets can occur whilst parties are still living together and can even be finalised before the parties become divorced. Australia is an equitable distribution country, which means that in property settlement proceedings, net wealth is not necessarily split 50/50.

A spouse’s entitlement to the property of the relationship is based on the principles of property division as set out in the Family Law Act 1975 (Cth). Generally speaking, the Court follows a four-step process when determining a property settlement. Those steps are:

1. Identifying the assets and liabilities which are available for division;
2. Identifying the financial and non-financial contributions of each party;
3. To consider the future needs of both parties, such as their age, health and income earning capacity; and
4. To consider whether the proposed property settlement is just and equitable in all the circumstances.

The fault of a spouse for the breakdown of the relationship is not a relevant factor when determining a property settlement.

Step 1: Assets Are Valued 

Divorce in Australia: who gets what? The first step in determining a property settlement  involves identifying the property pool available for distribution. This includes the assets, liabilities, and superannuation of each spouse.

The property pool is calculated as at the date of settlement or Court hearing, and not at the date of separation. This means that all assets and liabilities need to be included in the property pool, even if some of those assets or liabilities have been acquired post separation.

Assets include, but are not limited to:

• Real Estate
• Cars
• Savings
• Shares
• Compensations
• Jewellery
• Superannuation

Once the assets and liabilities have been identified, they then need to be valued. If parties are unable to agree on the value of a particular asset, the parties may need to have the asset formally valued. 

It is important to note that it is not just the assets that are split in a financial settlement but the associated debts as well. Meaning that if one party is given a larger portion of the asset pool, they might also be entitled to more debt obligations. 

Step 2: Contributions of Both Parties Are Valued

Following the identification of the property pool, consideration is given to the financial and non-financial contributions of the parties to the acquisition, conservation and improvement of the relationship property.

Financial contributions can include an inheritance, a personal injuries settlement or a windfall received before, during or after the relationship. Non-financial contributions can include a spouse’s role as homemaker and parent, or the work that one spouse carries out to renovate the family home which improves the value of the property. 

A spouse who makes a financial or non-financial contribution may receive an adjustment of the property pool in their favour to account for their contribution or contributions to the relationship.

If one of the parties is deemed to have "wasted" assets rather than "contributed" to them, this will be taken into account in favour of the other party when determining who gets what in a divorce.

Step 3: Determining The Future Needs 

Calculating the future needs of both parties takes into account health, age, income, care and other emerging financial circumstances. The pool of assets will subsequently be adjusted to reflect the future needs of both parties.

Step 4: To Consider whether the Proposed Settlement is Just and Equitable

The final step involves taking an overall look at the proposed settlement and considering whether in all the circumstances the proposed settlement is just and equitable. 

Understand More About Family Law Property Settlements and Divorce in Australia with wilson/ryan/grose

Separation following the breakdown of a relationship is a complicated legal process, both technically and emotionally. Both parties need to be equipped to properly deal with the process in order to ensure an equitable split of assets following the divorce.

At wilson/ryan/grose, our experienced and knowledgeable family law team will help ensure a fair and measured divorce process. We are a diligent in our approach to proceedings whilst also working with compassion to help you through what can be an incredibly difficult process. If you are looking to ascertain who gets what in a divorce, or are interested in how are assets divided in a divorce Australia, contact a member of our team today.