RMB Family Law Division explains the four steps involved in property settlements.
Property settlement allows parties involved in a separation to divide their assets, liabilities and superannuation so as to sever and finalise the financial ties between them.
The first step is to identify and value the asset pool for distribution, with both parties required to provide full and frank financial disclosure.
Failure to fully disclosure all assets, liabilities and financial resources may result in an agreement being set aside.
The second step is to take into account the contributions of the parties, both financial and non-financial, to the acquisition, conservation or improvement of any of the property.
This consideration is given both as at the date of cohabitation (i.e., taking into account the financial position of the parties at the outset of the relationship) as well as significant contributions made during the relationship. It is important to note that contribution to the welfare of the family, including any contribution made in the capacity of homemaker or parent – is also taken into consideration.
Thirdly, consideration is then given to the future needs of the parties. There are a number of factors which can be taken into consideration and the weight to be placed on each of the relevant factors varies depending on individual circumstances.
Some of the future needs the Court will consider include the age and state of health of each of the parties; length of the relationship; whether there is any income discrepancy between the parties; the income, property and financial resources of each; the physical and mental capacity of each party to gain employment; whether either party has the care or control of a child of the relationship; and if either party is cohabiting with another person and the financial circumstances relating to the cohabitation.
Lastly, after having ascertained the asset pool and taken into consideration the contributions and future needs of both parties, one then needs to take a step back and look at the agreement reached in order to determine whether the overall agreement is in all the circumstances… is just and equitable.
There is no black and white calculation or approach to property settlement. It is a matter of taking into consideration all the aspects that are specific to the matter and weighing up what is just and equitable in those circumstances - whether the parties are reaching an amicable agreement between themselves or going through the Court process to a final hearing.