When you’re in the middle of a divorce it can be hard to think about the practical stuff – like dividing your assets – but it’s essential that you do. Discussing these matters with an experienced divorce lawyer as soon as possible will give you the best chance of a stress-free, fair settlement.
To help you get started we’ve created a guide to dividing your assets in a divorce, from filing for divorce, to binding financial agreements and division of assets.
How are assets divided in Australia?
There is no one-size fits all formula for dividing assets during a divorce in Australia. Instead the family court will consider a number of factors when making a decision:
- First they’ll collate and value assets, including anything that has financial value. For example, real estate, vehicles, superannuation entitlements and inheritances.
- Next the court will value contributions of each party. They’ll look at both financial contributions (like salary income and property improvements) and non-financial contributions (like raising a child or homemaking).
- Calculating future needs is the next step. During this stage they’ll consider the positions of each party including their age, income, care of children, financial circumstances and more. The court will then make necessary adjustments befitting these future needs.
- Ensuring the division is fair. Lastly the court will consider whether the outcome of this property settlement will be equitable.
Importantly the division of property is not always 50/50. In fact, in many cases it favours the financially weaker party taking into account their needs and the future earning potential of the more well off party.
Resolving your settlement outside of court
It’s always better to resolve your property settlement amicably outside of court whenever possible. It’s a good idea to have a discussion with each other soon after the relationship ends (where possible) to move towards an agreement.
You should cover division of assets, care of children, any financial maintenance and all other necessary arrangements and write it down so that expectations are clear. If you’d like to formalise this agreement there are a couple options:
These are legally binding agreements that govern the share of property each party is to receive in the event of divorce. If prepared correctly by an experienced family lawyer they are legally enforceable and must be followed. They can be created during or after a relationship and do not need to be formalised by a court.
A consent order is similar to a binding financial agreement in many ways. This is a quick, easy and affordable way to prepare an agreement around parenting, finances, property division and spousal maintenance. These agreements must be formalised by the court.
Going to family law court
If you are unable to resolve property settlement using the methods described above, litigation is the last resort. This option will mean that the family law court will decide property settlement for you.
This can be stressful, expensive and time consuming so usually couples avoid this unless there is no other way forward.
Book a complementary first consultation
If your relationship or marriage has ended it’s a good idea to get legal advice from an experienced family lawyer right away. The team here at Testart Family Law can help lay out your options and suggest the best course of action – whether that’s a non-legal settlement, a binding financial agreement or litigation.
Get in touch today to book a complementary first consultation.