Property Settlement Orders in Family Law

If you have separated from your spouse or de facto partner, you may apply to the Federal Circuit Court or the Family Court for a property settlement order under the Family Law Act 1975 (Cth). Family law in Australia recognises that in addition to an emotional relationship, parties to a marriage or de facto relationship may also have a financial relationship. Whilst the emotional relationship is brought to an end by separation or divorce, the financial relationship is ended by a property settlement order.

The property settlement order deals with all property (assets and liabilities) between the parties to a relationship and takes into account each party’s financial situation. It essentially establishes how separated couples can divide the property they shared together in a marriage as fairly as possible. This article aims to deal with some common misconceptions of property settlement orders.

The 50:50 Property Split

Contrary to popular belief, parties to a relationship will not always get 50% after separation. There is no rule that a party should get 50%. Instead, Courts will examine each application on a case by case basis. Fairness is the key driving principle in a Court’s decision as to who gets what. For example a Court might consider each party’s contributions to the relationship. Who cared for the children? Who was the homemaker? Who was the breadwinner? Perhaps all these roles were shared by each party. The Court will also consider the future needs of each party. Does one of the parties currently suffer from an illness that will require expensive medical treatment? Is one of the parties due to retire soon and might hence not have as much earning capacity as the other party? These are just some of the considerations a Court must turn to.

Pre-Relationship Property

Another common misconception is that property held by either party before entering the relationship will be given back to that party after separation or divorce. A common example of this is the house that a party might contribute to a relationship. The Court will recognise the fact you owned the house before entering into the relationship, and that you essentially contributed that house to the relationship. However, your contribution might have been met over time by your spouse’s or partner’s contributions as they cared for the house and kept it maintained. This is especially the case for longer relationships.

Women Get More

It may be the case that women do get more from property settlements. However, this is only reflective of the fact that if the couple had children, the women are more likely than the men to choose to become the primary carer of those children after the relationship ends. Caring for children places a considerable financial burden on carers and the Court will provide for that. Women might not get more if the man in the relationship chose to become the primary carer or if the couple did not have children.

Gifts and Inheritances

The last commonly held misconception is that a party can retain any gifts or inheritances from their family. It may be difficult to distinguish sometimes whether a gift was intended to be given just to the party or to the relationship. A good example could be the new fridge or toaster your parents bought for you after you and your partner or spouse moved into a new house. Even though your parents might have said it was only for you, it is likely your partner or spouse helped clean the fridge or change the lightbulbs in it. Just like pre-relationship property, their contributions in terms of upkeep might match your parent’s initial financial contribution when they bought it for you.

There are many more misconceptions and ambiguities surrounding property settlement orders. If you have any questions, or you would like to initiate a property settlement order, email Straits Lawyers at info@straitslawyers.com or call us at 08 8410 9069.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.