The Court’s 4-Step Approach to Property Division

There is no 50/50 rule. In determining what is “just and equitable”—that is, fair to both parties—the Federal Circuit and Family Court of Australia follows a four-step approach.

Step 1: Identify and value the property between the parties

The parties must first establish a joint property pool. The property pool will include any assets, liabilities and superannuation controlled individually and jointly between both parties, even if this property was acquired prior to the relationship.

Both parties have a duty to provide full and frank financial disclosure throughout the course of the proceedings. You are required to provide your ex-partner with any relevant documents and information, including pay slips, bank statements, ATO documents, valuations of your motor vehicle(s), superannuation statements, and more.

Concealment of a significant asset can be considered misrepresentation or fraud, and can be grounds for setting aside any Final Orders or BFA.

Step 2: Consider the financial and non-financial contributions of each party

After establishing the parties’ joint property pool, the Court will then assess each party’s contribution to that pool. The contribution of each party is relevant to the question of what will be considered a just and equitable outcome. For instance, a 50-50 contribution assessment will tend to support a 50-50 property division.

The Court will first consider the initial contributions of each party and what each party brought into the relationship, such as real estate or a motor vehicle acquired prior to the relationship.

The Court will then consider how each party contributed during the relationship. Earning income and acquiring assets is not the only way a party may contribute. Non-financial contributions such as cooking, cleaning, maintaining the home and childcare are often given the same weight as financial contributions. Any wastage by a party, for example gambling, will also be considered at this stage.

Step 3: Consider the current and future needs of each party

The Court will also consider the current and future needs of each party in determining a just and equitable property division.

Relevant considerations include each party’s age, health, earning capacity, access to significant assets or financial resources, ability to borrow funds from the bank, and whether one party has the full-time care of a child.

Step 4: Consider whether the proposed settlement is just and equitable

Finally, the Court will take into consideration the first three steps to determine whether it is just and equitable to make any property settlement orders.

At Terese Wacyk Legal, we can guide you through each step of the property division process and advocate for a fair outcome that reflects your contributions and future needs.