Hi, my name is Dakota Hallett, and I’m a family law solicitor here at OMB Solicitors. Today I’m going to chat with you about what the court considers in a property settlement matters post-separation.
So, following the breakdown of a de facto relationship or marriage, it may be necessary to determine the assets and liabilities of the parties and how they’re going to be divided.
So, in some circumstances, property settlement orders may be necessary or required where there’s joint assets owned and in other circumstances, it might be necessary just to achieve a just and equitable division of the property.
The Family Law Act sets out the process that the court considers when determining the division of assets and liabilities between the parties, and the process is the same for both de facto couples and for married couples.
So, the four things that the court considers, there four elements, and the first one is they identify the asset pool that’s available for division. The second thing that the court considers is the contributions of the parties.
The third thing that the court considers is the future needs of the parties, and the fourth thing that the court considers is whether the ultimate division of the property as a whole is just and equitable.
So turning back to the first point, determining what the asset pool is available for division, this includes the assets, liabilities, and financial resources of both parties, whether it’s held in their name solely or jointly or in the name of an entity such as a company or a trust.
The important thing to note with the asset pool is that it is determined as the date of a trial and not at the date of separation. So for example, if the property, for example, is worth $1 million as at the date of separation and at the date of a trial, it’s worth $1.2 million, it’s the latter that the court will consider as its value.
So the second thing that the court considers is the contributions of the parties to the asset pool that exists. These include financial contributions, non-financial contributions, and the contributions as homemaker and parent.
So financial contributions are monetary and they include things such as income, investments, inheritances and gifts, just to name a few, and non-financial contributions include renovations or repairs to a property that has increased the value of that asset.
Lastly, the contributions of homemaker and parent consider who was the primary carer of the children, if applicable, and who was the responsible for the home-making duties, such as the household chores of cleaning and cooking.
So, the court considers contributions at three different stages. At the initial stage of the relationship, so that they can determine what assets each of the parties had at the commencement of the relationship, then they considered the contributions during the relationship and also at post-separation.
The third thing that the court considers is the future needs of the parties and whether an adjustment needs to be made. The future needs are determined… Sorry, I’m going to start that one again, I just muddled it around.
So, the third thing that the court considers is the future needs of the parties, and this is considered in Section 75-2 of the Family Law Act, and it sets out the future needs factors that may warrant an adjustment in the property.
For example, future needs factors such as the age, health, and earning capacity of the parties, and also who has the primary care of the children, whether each party has repartnered or whether the either party has access to a financial resource, and the final thing that the court will consider is whether the ultimate division of property is just and equitable.
When considering this, the court not only looks at the percentage division, but also the actual assets that are to be retained by both parties.
So, for example, if one party is to retain all of the cash and one party is to retain all of the super, the court will likely find that that is not just and equitable because obviously the party that has access to all the cash will be able to use those funds immediately, whereas the party that has access to all the super won’t be able to access those funds for some time.
I hope that has helped you understand what the court considers in property settlement matters, and if you are unsure as to what you are entitled to in your family dispute, please give me a call or reach out and book in for an initial consultation.