Property settlement is the division of assets following a separation between the two parties. Division of property is not a simple matter of splitting everything 50/50. It is a complicated process that involves calculating assets, determining contributions and identifying relevant factors that tip the balance of property distribution.
1. Determining the "Property Pool"
The basic principle behind property settlement is that each partner leaves the relationship with the property that they legally own.
Before this can be determined, there needs to be an evaluation of all the items that both parties held at the time of the separation. This includes:
- Assets such as real estate, cars, personal valuables, shares etc.
- Liabilities such as mortgages, personal loans and credit card debt.
- Superannuation entitlements.
The final tally of all these items is known as the 'property pool available for distribution’, or property pool for short. It is important to note that the property pool includes all items held jointly and separately.
2. Identifying Contributions
Contributions are not limited to the assets that the partner provided at the start of the relationship, or the income they generated during it. Contributions also include domestic tasks such as household chores and raising children.
A party may be entitled to a greater share of the property pool under special circumstances. What circumstances allow these considerations are outlined under s75(2) and s90SF(3) of the Family Law Act 1975 (Cth). The 19 matters considered include:
- The age and health of the parties
- Whether a party has the care and control of a child of the marriage.
- The duration of the marriage and the extent to which it has affected the earning capacity of the party.
4. Agreements and Binding Financial Orders.
Every property settlement should seek a just and equitable outcome. Reaching a fair agreement takes a large amount of effective discussion and conversation. It is generally advised that parties avoid litigation if possible, as court is both expensive and can damage long term relationships between separated partners and their children.
Family law experts such as TLG Law can act as mediators and advisers in order to guide property settlements towards a quick and amicable outcome. This can include dispute resolution as well as general legal advice about the settlement process.
The end goal of a property settlement is arriving at a Financial Agreement or Consent Order. These are binding legal agreements that are determined to be valid under the Family Law Act and the court.
TLG Law - Family, Children and Animal Law
Level 29, 239 George Street, Brisbane, Queensland, 4000
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