In Australia, the Family Law Act governs property between spouses. The property may include all valuable assets like real property owned jointly or owned in common by spouses and personal properties like jewelry, car and bank deposits as well as other entitlements like service leave entitlements, superannuation, compensation claims and collectible debts and others.
In Australia, property settlement is a process by which a couple may make arrangement on how they treat and manage their property during the marriage and more specifically, how they will divide their property after separation or the grant of divorce. Under Section 9 of the Family Law Act, the Court can make relevant orders for property settlement when the marriage is ended.
Once the decree of divorce is granted, the couple is given 12 months to execute their property settlement, which could be in any of the following form:
- Consent orders. The parties are encouraged to reach an agreement concerning the division of property outside the Court. Once the settlement is reached, they can file a Consent Order to the Court to formalize the agreement.
- Binding Financial Agreements. This is an agreement embodying the provisions under Part VIIIA (marriages) or VIIIAB (de facto relationships) of the Family Law Act 1975 (Cth). Also known as â€œpre nuptial agreement,â€œ a married couple or parties intending to get married may stipulate as to how their property may be treated or managed during the marriage or how the property would be divided when the marriage is severed. The agreement must comply with the legislative requirements to be binding and effective.
- Property orders. If the couple cannot agree on how to divide their property, the husband or wife can ask the court to make a Property Order. The court can order that the property be sold and the proceeds distributed to the parties, or order one spouse to pay out the share of the other spouse if he or she wants to keep the property in whole.
The 4 steps in property settlement
Section 79 of the Family Law Act provides the 4 steps of a property settlement.
First step Identification of property. The couple must collate and identify their assets and liabilities acquired before or during the marriage and those acquired after separation.
Second step Assessment and determination of the spouses asset contribution during the marriage. The assessment with also includes the determination of the property from the former marriage or de facto relationship. It is not necessary that the other spouse has contributed money in the acquisition of property. The Court will also assess the value of property contributed by each party whether financial and non-financial contributions made directly or indirectly by one spouse for the benefit and welfare of the family.
Third step Determination of future needs of the former spouses. The Court will have to consider some determining factors to determine the future needs of the parties and make appropriate adjustments based on the age and health of the parties, their mental and physical capacity to obtain future employment, the responsibilities to care for minor children and several other factors.
Fourth step Finally, the court will have to evaluate whether the proposed property settlement is fair, just and equitable to both parties.