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Property and Financial Orders
The breakdown of a marriage or de facto relationship is a highly stressful and emotional charged time.
Unfortunately, there are many misconceptions about family law property and financial orders fuelled by well-meaning friends and family willing to offer you (usually incorrect) advice on property and financial orders.
Obtaining a just and equitable property settlement can be a complex process that requires the skill of a highly experienced property settlement lawyer. Learn more about our team of highly experienced lawyers and read through our many positive client reviews. We are proud to be the trusted family law solicitors for families all over Australia. Contact us today to discuss your personal situation and receive the expert advice you need.
Duty to make full and frank disclosure
Each party in family law proceedings has a duty to make full and frank disclosure of all matters relevant to an issue in proceedings. This duty applies before proceedings are commenced and throughout the proceedings. It is a continuing obligation on both parties.
There are also specific requirements in property settlement matters, including that each party must disclose to the other all relevant information about a party’s direct and indirect financial circumstances. This means that parties must disclose all sources of income, interest, property and any other financial resources to which they have access to. It does not matter whether the financial resources are owned by the party directly or indirectly (such as through a trust). Parties must also disclose information about any disposal of property, whether that be through a sale, transfer or even a gift.
There can be very serious consequences for a party who breaches this duty including costs order being made against the defaulting party, or in very serious cases, fines or imprisonment.
What is considered by the court in a property settlement?
Where parties cannot reach their own agreement, the division of assets, liabilities, superannuation and spouse maintenance is determined by the Federal Circuit and Family Court of Australia.
There is a general four step process which the Court usually takes to determine the appropriate property orders to be made:
- Determining what the asset pool comprises of – Property comprises all assets such as land, money in the bank, furniture, motor vehicles, insurance policies and the like. An interest in a business is also an asset forms part of the pool. A superannuation entitlement is not technically property but can be taken into account and is able to be split between the parties;
- The Court looks at the contributions made by each of the parties at the commencement of the relationship, during the relationship and following separation. This includes both financial and non-financial contributions, such as contributions made by a parent or homemaker.
- After assessing the respective contributions of the parties, the Court determines whether there ought to be a loading in either party’s favour to reflect ‘needs’.
- The Court ensures that in light of the circumstances of the case as a whole, the orders which it makes are ‘just and equitable’, or fair and reasonable in all the circumstances.
How does the court determine needs?
As part of the four stage process of making property settlement orders, the Court will determine the future needs of the parties by making an assessment under s75(2) of the Family Law Act 1975. This assessment involves a number of factors, including:
- The age of each party.
- The health status of each party.
- Each party’s earning capacity including whether that earning capacity is affected by the care of a child or children of the relationship;
- Whether one party made a contribution to the income of the other party (for example by caring for children so that the other person could continue to work fulltime).
- Whether one of the parties has the care and support of a child or children.
After the Court undertakes this assessment, the court has a discretion to adjust the property of the parties to take into account one or more of these factors.
If on a contributions basis the Court has determined that the property should be split equally, the court may find that an adjustment is necessary because a party has a significantly higher earning capacity than the other party, who may also have primary care of the children. In that case the court may use its discretion to adjust the initial equal assessment so that one party receives a higher proportion of the asset pool.
What is just and equitable?
Section 79(2) of the Family Law Act 1975 requires that the Court must not make an order altering the property interests of parties unless it is satisfied that in all the circumstances of the case that it is “just and equitable” to make the order.
There is no definition of “just and equitable” in the Act, so experienced property settlement lawyers will consider principles established from other cases decided by the courts and expertly apply them to the specific circumstances of a case.
The Court will not focus on the percentage division of the property settlement but rather is required to make an assessment as to whether the overall effect of the orders proposed is just and equitable. This requires the Court to look at the property division it proposes using the first three steps of the four step process and use its discretion to ensure that the ultimate result is one which is just and equitable in all of the circumstances.
What is just and equitable will be determined by reference to the specific case that the Court is considering and the individual facts of that case. This is a complex exercise because the Family Law Act 1975 does not indicate the relative weight that should be given to different circumstances, or how a conflict between opposing considerations should be resolved – those things are left to the Court’s discretion.
Why you need a property settlement lawyer from Lawpoint
There is no black or white answer to a property settlement case. The Court has a wide discretion to determine each property settlement case on its own specific facts.
Therefore, it is essential to obtain legal advice from a property settlement lawyer experienced in family law who can provide you with advice as to your likely entitlements. Obtaining advice as early as possible from our highly experienced family lawyers will help you navigate this complex area of the law and assist you to try and minimise the stress and cost following the breakdown of a relationship.
Our property settlement lawyers will explain your rights in terms that you understand and help guide you away from a property settlement dispute. Sometimes, property settlement court disputes are unavoidable, however most cases can be resolved by negotiation with the assistance of an experienced and empathetic property settlement lawyer.
Contact us today to make an appointment with a family lawyer.
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