Step 1: Should there be a property settlement at all?
For most couples going through a marital separation, the answer is yes – there will be jointly owned assets to divide, or both parties will have made significant contributions to the assets available for division.
Step 2: Determining the property pool
In Australia, the property pool includes all assets, liabilities, superannuation and financial resources in which the parties have an interest under joint names, their respective sole names and, in certain cases, via corporate entities and trusts, whether those interests exist in Australia or overseas.
Assets acquired before the relationship are also usually included in the property pool. This differs from Singaporean family law, which excludes from the property pool any assets acquired before the relationship commenced, unless they were significantly improved during the relationship or the asset was used or enjoyed by both parties and their children during the relationship.
In contrast to Singaporean property settlements, in the majority of Australian marital separation matters, the property pool includes gifts or inheritances, even if received before the relationship commenced or after separation.
Step 3: Looking at contributions made by each party to the acquisition, conservation and improvement of the property pool
There is no presumption of equality of contributions in Australian family law matters. Instead, the court weighs the financial, non-financial and homemaker/parenting contributions to determine a percentage division based on the respective contributions. Parenting contributions are given significant weight, even if the other party has made substantial financial contributions.
Step 4: Assessing the parties’ future needs
Next, the court will consider whether future needs must be taken into account and whether a further adjustment should be made. Future needs usually include:
- income and earning capacity
- property and resources
- health issues; and/or
- care of children under the age of 18 years
Step 5: Is the order just and equitable in all the circumstances?
Every matter must consider whether the outcome of the above steps will be just and equitable in all circumstances. While applying the five-step approach may give an indication of each party’s entitlements, always seek professional legal advice from experienced practitioners who are aware of the nuances of the court’s application of this process.
Please contact a member of our Family & Relationship Law team if you would like further advice on property settlements and your entitlements.