The team at Austere Legal are experienced in handling all marriage and de facto property settlements. We strive to get you the absolute best result by protecting you and your family’s property.
Property settlements extends to assets that are acquired by either or both parties during the marriage. It can also extend to include assets that were owned by either party prior to the marriage that have been used for family purposes (e.g. cars). The Family Court of Australia and Federal Circuit Court also recognises intangible assets, such as superannuation and any entitlements to benefits from a family trust, or inheritance, such as property or money.
Under section 81 of the Family Law Act, the court shall, as far as practicable, make orders that will “finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them.” Before this is achieved, we can advise you of the “four-step process”, commonly considered by the courts when assessing property applications.
Step 1: Identify the Assets, Liabilities and Financial Resources of the Parties
There is an obligation on the husband and wife, under rule 13.04 of the Family Law Rules 2004, to give “full and frank” disclosure of all information relevant to the case, including the honest identification of all assets, liabilities and financial resources. This includes shares or money coming from trusts. To do this, each party must notify the court of:
In relation to liabilities, each party is obligated to disclose:
Step 2: Assessing the Contributions made by the Parties
If the court is satisfied that all assets, liabilities and financial resources have been adequately disclosed, it is then necessary to assess the extent of the contributions each party has made to the acquisition and maintenance of this property.
According to section 79(4) of the Family Law Act, there are four primary modes of contribution that are recognised by the courts.
Firstly, the court will consider any direct financial contributions made by each party for the acquisition of any property. An example may be, paying part of the deposit on a house or car. The court will also consider any direct financial contributions to maintaining or improving the property, including any renovations or repairs made to the family home.
The court also considers any indirect financial contributions to the acquisition and maintenance of the property. This may include where one party pays utility bills which may enable the other party to pay the mortgage.
Any non-financial contributions will also be taken into account. Examples of these are home making and parenting duties, such as driving the children to school. The court also considers when the other parent’s main priority is to be the breadwinner of the house.
When the court considers the contribution, there is a discretion by the court to determine the weight to be given on each contribution.
Step 3: Evaluating each party’s future needs
Further to assessing the contributions made by each party to the settlement, the courts must evaluate the future needs of the party before negotiating a property settlement.
Under the Family Law Act, the court shall take into account the following:
(a) the age and state of health of each of the parties; and
(b) the income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment; and
(c) whether either party has the care or control of a child of the marriage who has not attained the age of 18 years; and
(d) commitments of each of the parties that are necessary to enable the party to support:
(i) himself or herself; and
(ii) a child or another person that the party has a duty to maintain; and
(e) the responsibilities of either party to support any other person; and
(f) the eligibility of either party for a pension, allowance or benefit under:
(i) any law of the Commonwealth, of a State or Territory or of another country; or
(ii) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia;
and the rate of any such pension, allowance or benefit being paid to either party; and
(g) where the parties have separated or divorced, a standard of living that in all the circumstances is reasonable; and
(h) the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training or to establish himself or herself in a business or otherwise to obtain an adequate income; and
(ha) the effect of any proposed order on the ability of a creditor of a party to recover the creditor’s debt, so far as that effect is relevant; and
(j) the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party; and
(k) the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration; and
(l) the need to protect a party who wishes to continue that party’s role as a parent; and
(m) if either party is cohabiting with another person—the financial circumstances relating to the cohabitation; and
(n) the terms of any order made or proposed to be made:
(i) the property of the parties; or
(ii) vested bankruptcy property in relation to a bankrupt party; and
(naa) the terms of any order or declaration made, or proposed to be made, under Part VIIIAB in relation to:
(i) a party to the marriage; or
(ii) a person who is a party to a de facto relationship with a party to the marriage; or
(iii) the property of a person covered by subparagraph (i) and of a person covered by subparagraph (ii), or of either of them; or
(iv) vested bankruptcy property in relation to a person covered by subparagraph (i) or (ii); and
(na) any child support and
(o) any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account; and
(p) the terms of any financial agreement that is binding on the parties to the marriage; and
Step 4: The Court must be satisfied in all the circumstances of the case, that it is just and equitable to make the orders
The final step in a property settlement is for the court to be satisfied that, in all circumstances, it is just and equitable to make the order it has deemed appropriate from the evidence that has been provided. Our firm is able to give you advice on what the courts deem appropriate in these circumstances.
Note the above processes are not applicable to financial agreements that is binding on the parties.
Call us today on (02) 8897 3534 to arrange an appointment with our team.