Property settlement is the process of adjusting interests in property upon separation. It does not matter in whose names various assets are held, as the court has the power to address interests in all types of property, including assets held in family trusts and companies. The Family Law Act has broad and sweeping powers to make orders binding not only parties, but trustees and third parties.
The court follows a distinct process in firstly deciding if the legal interests of the parties should be adjusted, and if so, then a four step process is followed to reach a decision:
Step 1 – Ascertain all of the assets, liabilities and superannuation of the parties. This can include valuations of certain assets, and also a disclosure of documents to work out how some interests are held, such as trusts and companies
Step 2 – Assess the contributions of the parties to the assets, liabilities and superannuation, and arrive at a percentage adjustment to the total pool of net assets to reflect these contributions. This includes contributions as a home maker, as an income earner, by windfalls and inheritances and also by the improvement of assets such as a home by efforts such as renovation.
Step 3 – Making an adjustment based upon looking age the age of the parties, their health, ability to earn income, care responsibilities for children and other persons, relative standard of living and other factors relating to the future of each of the parties.
Step 4 – After making the above assessments, the court then looks to what requires adjustment, and this looks at who gets to retain what assets and liabilities, together with superannuation, noting that superannuation interests can be divided between the parties in most cases.
You need to know as soon as possible where your case falls, and what your expectations should be as regards settlement. Negotiation is preferred, but not always likely to achieve a result. Do not be intimidated by court proceedings, as there are a number of structured steps to provide a timetable working toward attending mediation. The court process is designed to resolve disputes efficiently, and so following this process helps to set in place a timetable that will focus everyone’s attention on ending the matter as early as possible.