Family Law Library

Dividing the property in Australia

Hi, I’m Vanessa Mathews for Mathews Family Law, and I’m going to be talking about property distribution today. Property distribution is about how the assets and liabilities of the marriage or de facto relationship are divided.

Assets are the things of value that you own, like, a home, a car, a bank account, investments, savings, superannuation, and furniture. Liabilities are the things you owe to others, like, a mortgage or a loan or even credit card debt.

For the most part, when it comes to questions of property and property division, de facto couples have the same rights and obligations as married couples. But some of the laws are different for de facto couples, depending on the state or territory they’re living. So you should always get professional legal advice to be sure how the law applies to your particular situation.

When a couple splits up, if they are married or if they’re in a de facto relationship, all of their property, both the assets and the liabilities, have to be divided between them. That is, they have to decide who owns what and who owes what.

When people come to me for help, I often hear things, like, ‘I don’t have to give him anything. I earn all the money, so it’s all mine.’ Or ‘She spent so much of our money over the years, she doesn’t deserve anything.’ Well, the law doesn’t work on emotions, but instead on the assumption that both people contributed to the marriage, perhaps in different ways, but both worked for the benefit of the shared union.

Now, some couples divide their property by themselves or with help from friends or professionals. If you choose to work it out just between the two of you, you can decide to split your property however you like. Generally, if you work with lawyers or through mediation, you have to follow the same four step process the court uses, which I’ll discuss later on.

You can also do this property division at any time, before you’re married and this is called a prenuptial agreement or even after you are married or when you’re in the process of divorcing.

Once you come to an agreement and sign this document, you can submit it to the court by applying for a Consent Order, if you want to, but you don’t have to. The court will allow you to make your own decisions, but will want to know that each of you had professional advice when you made the agreement, so that one side is not being duped or misunderstood something.

A Consent Order means your agreement has the strength of a court decision. So if one side breaches or goes against the agreement, you can take action against them immediately, without having to first sue, and get a court verdict.

If you can’t work out the property issues on your own, you can go to the court and let a judge decide for you. The law has a very logical approach to dividing up the property, which is the four step process I mentioned earlier. The first step is to figure out what actually are the martial assets and debts. You can start out by putting everything together, the house, cars, mortgage, loan, furniture, and calling that your property. If the couple has been together for only a short time, the court might remove certain things from the pile of matrimonial property. These are things that belonged to each individual before they married or started their de facto relationship.
So if you brought a car or a house to the marriage, and then you got divorced, the car would be yours. In the same way, if you came with a mortgage to the marriage, that debt is still yours if you get divorced.

But if you’re married for say, 10 or 15 or 20 years, a court, if it goes to court, will probably consider most of your joint marital property. And despite the rules in other countries, even property one partner may have inherited during the marriage or de facto relationship, is still considered joint martial property.

The second step of this four step process is to consider the contributions each side made to the marriage. There are two types of contributions partners can make. One is clear financial contributions, like, salaries, other types of income, inheritance, actual money or some type of physical property. But there are also non-financial contributions. For example, if one parent stayed home to take care of the children, they’ve contributed by saving money on daycare and enabling the other spouse to develop professionally and earn more. And by simply helping the family unit develop.

The next step is to consider the future needs of each partner. If the couple is older, and one partner never worked outside the home, the court will take into consideration that he or she may need more of the joint property, since they are less able to now go out and find a job. On the other hand, the court will also note that there are no small children, the mortgage is paid off, and there are no large expenses to be paid. So the financial needs are smaller than they once were.

If both people are young professionals with a good future outlook, the court will take that into consideration too. Also, does one partner still have to stay home to care for the children for an extended period of time, leaving them with less income? The court will also look at the health of each person. The one thing the court does not consider is whose fault is it, that the marriage or de facto relationship ended.

Australia has a no-fault divorce, meaning there does not have to be a reason or cause for the divorce, other than one side asking for it. So blame has no impact on property.

The fourth and final step is for the court to take all of this into consideration and make a just and equitable division of the property. That is, the court will split up the assets and the liabilities in a way that gives each partner what he or she needs and deserves. Just and equitable doesn’t mean everything will be split evenly and each person gets 50 percent. When the court decides who gets what and who pays what, the court will explain how this process will work.

So if the superannuation needs to be split, but the side can only get money in ten years, the judge will need to decide what happens in ten years or if there is a house and its value needs to be split between the two sides, the judge will decide if it should be sold, and the money from the sale divided or if one person will pay the other person his or her share, or if one person keeps the house and the other gets some other property of equal value.

A few suggestions I would make, when you begin thinking about dividing your property, make sure that as you create a list of your assets and liabilities, you don’t overlook anything significant. For example, people often forget superannuation or other retirement plans.

If you’re thinking about separating or if you’re in the process, and the need to be plain for how you’re going to deal with your property, start gathering documents, like, financial statements, tax returns, mutual fund statements, bank statements, check account statements. Make copies if you can, and keep them in a safe place.

If you have questions about property distribution or any of the issues related to divorce and separation, please visit our website, and feel free to call me to set up an appointment. I’m Vanessa Mathews from Mathews Family Law.