When a married couple decides to separate or a de facto relationship breaks down, most couples have a pool of assets, liabilities and superannuation to divide.
In family law, this is referred to as a property settlement and this agreement finalises the financials of the relationship. Parry Coates Family Law has created a step by step guide to provide an overview on how the division of property occurs.
1. Identify and detail the property pool
What are the assets, liabilities and superannuation benefits available for division between the parties? Assets can include, amongst other things:
• Family home and mortgage
• Motor vehicles
• Interest in a company and/or Trust
There may also be debt attached to any of these assets. We cannot include an asset without the associated liability.
2. Decide if a division necessary
Each matter is different and no facts are the same, therefore Parry Coates often ask the question – Is it ‘just and equitable’ to make a property settlement order dividing the property pool?” A property settlement order can be made by consent between the parties or by a Judge based on the evidence.
3. Assess the relevant factors
If a division of property is necessary, what is the division? This requires an assessment of the factors in sections 79(4) and 75(2) of the Act (sections 90SM(4) and 90SF(3) for de facto matters).
The 79(4) factors require consideration of:
• The contributions made by each party to the relationship/marriage – financial, nonfinancial and welfare contributions; and
Some of the 75(4) factors include:
• The current financial circumstances and future needs of each party and any children of the relationship/marriage. For example, income, earning capacity, health and age and arrangements for children under 18 years of age.
4. Assess and divide
Assessing the factors in step 3, what division would be ‘just and equitable’ remembering each family is different.