Property settlement is an integral part of resolving financial matters when couples separate from a marriage or a de facto relationship in Australia. Instead of simply dividing property equally, Australian family law requires a cadivorce property settlement lawsreful assessment of the parties’ overall financial position. Depending on the circumstances, the assessment may extend to savings, superannuation, investments, business interests, outstanding debts and other financial resources.
This blog explores the financial assets and liabilities Australian courts consider in a divorce property settlement.
Courts first identify the entire property pool to establish the net total value of all assets and liabilities for each spouse or for both spouses together. It doesn’t matter which one of them is registered as the owner, or whether they are owned individually or jointly. Every single item of property, as well as every debt, is appraised and then taken into consideration by the court.
Australian family law recognises a wide range of financial assets when determining a property settlement. Depending on the circumstances, the following assets may form part of the property pool.
Real Estate
Cash and bank accounts
Superannuation
Superannuation is treated as property under the Family Law Act 1975 and may be divided through superannuation splitting arrangements.
Investments
Business Interests
Personal Property
Trust interests and financial resources
In some cases, interests in trusts or other financial resources may also be relevant during the assessment.
Property settlements go beyond the physical asset itself. The court will also take into account any liabilities, as these are considered in relation to the total property pool value.
Common liabilities include:
The court considers the nature of each debt, how it arose and whether it should form part of the overall property settlement.
Once the property pool has been identified, there are a number of things that the court takes into account when dividing assets and liabilities. Some of the key factors include:
A knowledgeable separation lawyer Perth can help you understand which of these factors are most likely to influence your own outcome.
After the pool of assets has been determined, a systematic method is employed by the courts, unlike any arbitrary one. Such a method consists of four stages stipulated by the Family Law Act. Each step follows another until the most reasonable decision is reached.
The court identifies the property, liabilities and resources of the parties as well as their current legal and equitable interests. It is impossible to divide the property fairly without such a stage.
The court then establishes whether it would be just and equitable, having regard to all the circumstances, to adjust the ownership of the property. It helps to avoid unnecessary interference with the present situation.
Afterwards, the contributions of each spouse are evaluated. There are three types of contribution: financial contributions, non-financial contributions, and homemaking or parenting contributions. Direct and indirect efforts are considered.
Finally, future needs like age, health, capacity to earn money, and responsibility to take care of children are considered. Such a stage affects the equality of final distribution, depending on your situation.
The property settlement process in Australia goes much beyond sharing the family home. All assets and liabilities are considered by courts in the process, and contributions and future needs are applied to come up with a just solution. Division of the total sum will not necessarily be equal, given that fairness in such situations largely depends on specific individual factors. Seeking early assistance from property and financial settlement lawyers in Perth helps you understand your position and disclose your finances accurately.
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