Financial/Property Settlement After Separation
So your relationship is over. What next?
The Family Law Act 1975 (Cth) (the FLA) sets out the principles that the Court will adopt when determining a property settlement after the breakdown of a relationship (ss 79 and 75 FLA for a breakdown of a marriage and ss 90SM and 90SF FLA for the breakdown of a de facto relationship).
There is no automatic right or presumption that there will definitely be a property settlement following the breakdown of your relationship. In Stanford v Stanford (2012) HCA 52 it was established that when considering a property settlement, the Court must first consider whether it is just and equitable to make property orders by identifying the existing and equitable interests of the parties. So the Court will firstly want to know a bit of information about the circumstances of your relationship including its nature, form and characteristics.
If the Court then decides that it is just and equitable to make an order, then it will apply a Four-Step Process (also known as a Global Approach) in the assessment of property.
So what is the Four-Step Process?
The Four-Step Process allows the Court to assess a property settlement and consists of the following steps:
- establishing the net asset pool of the parties including valuation of assets;
- identifying the contributions made by each party to the net asset pool (including financial, non-financial, homemaker or parent contributions);
- calculating the future needs of the parties (including the parties’ age, health, earning capacity, care and support of the children etc); and
- considering the practical effect on the proposed property settlement and whether overall the settlement is just and equitable.
The Court has the discretion to enter property orders as appropriate depending on the circumstances of each case and with the intention that the orders are final.
No family law matter is ever the same and regardless of whether an agreement is reached directly between the parties, you should still seek legal advice on the agreement before signing on the dotted line. Our expert family and property lawyers at Greenleaf Legal are always ready to assist you so please contact us for an obligation free and private and confidential discussion today.