When a couple separates, one of the main issues that arises is how they are going to divide their assets. All of the parties’ assets must be taken into account, including real estate, bank accounts, cars and furniture, as well as any money held in trust accounts, shares and each of the parties’ superannuation. Liabilities must also be considered, such as the couple’s home and personal loans, and any credit card debt.
Some couples are able to agree how their assets should be separated, without the involvement of the Court. For these couples, a binding financial agreement should be drafted to formalise the agreement reached. Alternatively, the couple can file an “application for consent orders” in the Family Court of Australia. If no formal arrangement is made, both of the parties will be vulnerable to the other party changing their mind down the track and pursuing the other party for more of the asset pool, provided this is done within 2 years of a divorce order being made.
Unfortunately, many couples find it difficult to agree how their assets should be divided post-separation. In these circumstances, one of the parties must make an application to the Court for property and financial orders.
The Family Courts apply a four-step process to determine parties’ property rights:
- Identify and value the pool of assets.
- Determine the parties’ financial and non-financial contributions.
- Consider “future needs” factors, such as the earning capacity of both parties, or requirements for care of children.
- Consider what is a just and equitable result in the circumstances.
Our family lawyers are experienced in applying these family law principles to cases to work out the entitlements of the parties.