Division Of Property: A Four-Step Guide
- Written by: The Times
Upon the dissolution of a marriage or de facto relationship, the court employs a systematic approach, consisting of four steps outlined in accordance with the Family Law Act 1975 (Cth), to determine each party's entitlement to matrimonial assets and liabilities. It's crucial to understand that the court initially examines whether a property adjustment is warranted, given the circumstances.
Identifying the Property Pool
The primary step involves establishing the value of the matrimonial property pool, encompassing all assets, liabilities, superannuation, and other financial resources regardless of ownership. Should there be any disagreement regarding asset valuation, expert assessment becomes necessary.
Assessing Contributions
Once the property pool is defined, the court evaluates the contributions made by each party throughout the relationship. This assessment includes both financial and non-financial contributions spanning from the relationship's inception to its aftermath. Key considerations here include:
Instances where one party possessed significantly greater assets at the relationship's start, potentially warranting an adjustment.
- Recognition of non-financial contributions, such as domestic work, child-rearing responsibilities, or property improvements.
- Equal weight given to roles as breadwinner and primary caregiver in most cases.
- Acknowledgment of family assistance, whether through loans, gifts, or household support, as contributing factors.
These contributions are scrutinized on a case-by-case basis.
Considering Future Factors
After evaluating contributions, the court examines each party's post-separation circumstances to determine if one party stands to gain a financial advantage requiring an adjustment. Various factors are taken into account, including:
- Age and health status of each party.
- Income, property, and financial resources of each party, alongside their capacity for gainful employment.
- Custodial responsibilities for any children of the relationship.
- Financial commitments necessary for self-support, supporting dependents, or fulfilling obligations.
- Eligibility for pensions, allowances, benefits, or superannuation.
- Impact of the marriage's duration on earning capacity.
- Financial implications of cohabitation with another individual.
- Commitment to child support obligations.
Prioritizing Justice and Equity
Finally, after reviewing the preceding steps, the court evaluates the practical implications of any proposed adjustments. If deemed unjust to either party, the court exercises discretion to ensure a fair and equitable outcome based on the circumstances at hand.
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