Property settlement under the Family Law Act involves the division of assets between spouses or defacto partners after the breakdown of their relationship.
Property settlement can be obtained by way of a negotiated agreement formalised in Consent Orders or a Binding Financial Agreement, or if the matter is contested, by the Court making Orders following a final Hearing.
An application for property settlement can be commenced at any time after separation but must be made within 12 months of a Divorce becoming final, or within 2 years from the date of separation in a defacto relationship.
The general principles under the Act, which apply in assessing and adjusting each party’s entitlement, include:
- Identifying the assets and liabilities, which can include real estate, superannuation and credit cards in individual or joint names;
- Determining the contributions (both financial and non-financial) at the commencement and throughout the relationship and post separation;
- Ascertaining the relevant future needs, such as age and health, ongoing parenting of children under 18 and disparity of income or earning capacity;
- Whether the proposed settlement is just and equitable (the fairness test).
Contrary to popular belief, there is no formula for determining a division of assets and how a property settlement occurs depends on the individual facts and circumstances of each case.