There are several principles that the Court may choose to apply when looking to apportion the property once a relationship has broken down. In accordance with the Family Law Act 1975 (the Act), the Court generally takes a four-step approach when diving property in order to decide the percentage apportioned to each party.
By Alex Mandry Family Lawyers (Family Lawyers in Sunshine Coast).
Step 1: calculating the total pool of net assets
This involves identifying and valuing all the assets and liabilities of the parties. In most cases it does not matter whether assets are held in joint or sole names, providing that it can be established that the property was acquired or contributed to (financially or non-financially) during the relationship. On the same basis, it does not necessarily matter if the parties maintained separate bank accounts throughout the relationship, although a complete separation of finances in shorter relationships can have an impact on determining the appropriate division.
The assets which are included in the asset pool are those which were obtained or improved during the relationship such as superannuation, real property, businesses, trusts, shares, bank savings, household goods and effects, etc.
Similarly, all liabilities accumulated during the relationship must be included such as mortgages, credit cards, personal loans, outstanding tax debts or business debts, etc. Both parties are required by the Court to disclose all their financial assets and liabilities in order to properly establish the asset pool for the purposes of a property settlement.
After reviewing all the assets and liabilities, the Court will determine the value of the net asset pool available for distribution and may treat differently the non-superannuation asset pool as compared to the superannuation asset pool.
Step 2: assessing financial and non-financial contributions
Once the asset pool has been established, the Court then assesses the financial and non-financial contributions that each party has made to the asset pool. These contributions can either be direct, financial contributions such as employment income or indirect, non-financial contributions, for example, personally undertaking renovations to the home.
The Court will consider any financial windfalls, such as inheritances, gifts or redundancies received by either party, as well as the financial position of each party at the beginning of the relationship. The Court also gives substantial weight to the non-financial contributions made by the homemaker and carer of the children.
Step 3: future needs & adjustments
At the end of this stage, the Court will have determined a percentage division for each party. The Court will then consider the future needs of the parties. Broadly speaking, these are those needs which will impede the parties
