In the event that you and your partner are unable to reach negotiated agreement for the division of property after the breakdown of your relationship, the division of your assets, liabilities and superannuation, will be determined by the Family Court. The Court may also make additional orders for spousal maintenance in certain circumstances.
The Court will follow the following four-step process to determine the appropriate property orders to be made:
- Determine asset pool to be distributed. The asset pool includes all assets such as land, money in the bank, furniture, motor vehicles, insurance policies and the like. A superannuation entitlement is defined as “property” but can be taken into account and is able to be split between the parties.
- Consider the contributions made by yourself and your partner during your relationship. This includes ‘non-financial contributions’ made to the upbringing of any children and your contributions to the welfare of the family generally, as well as ‘financial contributions’ such as assets brought into the relationship, earnings during the relationship, inheritances, and other windfalls. The court may find that one of the party’s contributed significantly more to the relationship and make an adjustment in their favour.
- After assessing the parties’ relative contributions, the court will then consider whether there should be a loading in either parties favour to reflect ‘needs’. In assessing ‘needs’ the court would look at things such as relative earning capacities, state of health of the parties and the need for the primary carer of the children to provide a suitable home for the children.
- The final step is where the court considers the circumstances of the relationship and the parties needs as a whole, to ensure the orders which it ultimately makes are ‘just and equitable’.
In addition to the “four-step process”, the court will also consider whether one party should be liable to maintain the other party, if it deems the other partner is unable to support him or herself adequately after separation. Provided the liable party is reasonably able to maintain the other party, the court may consider the following situations appropriate for the award of spousal maintenance:
- One spouse having primary care of minor children of the relationship; or
- A physical or mental incapacity for employment; or
- Any other adequate reason.
If you have recently separated or considering separating from your spouse, it is critical that you properly understand your family law entitlements and obligations.