How does the Court divide Assets in Property Settlement Cases?

There is no presumption in Australian law that marital assets must be divided equally between husband and wife. Instead, the Court has broad powers to make Orders for a just and equitable division of assets.

In deciding how the assets of a husband and wife should be distributed, the Family Court follows a 4 step process:

Step 1:What are the net property and financial resources. This includes superannuation entitlements, as well as the value of assets whether held personally or in trusts, partnerships or companies.

Step 2: What contributions has each party made. This includes not only financial contributions, but also non-financial contributions, and contributions as a parent and homemaker. The Court also takes into account what assets each party brought to the marriage and inheritances or gifts received from third parties.

Step 3: The Court decides whether any adjustment is required for the future needs of each party, taking into account matters such as care of children, disparity in income earning capacity, health, age and availability of financial resources.

Step 4: The Court must stand back and ensure, at the end of this process, that the proposed asset division is just and equitable.

Does the Court exclude Pre-Marital Assets?

A common misconception exists that the Court cannot make Orders affecting the assets that each party brought into the marriage, or that parties get back "dollar for dollar" the assets they introduced to the marriage. This is incorrect.

Whilst parties receive a contribution weighting to recognise their introduction of assets at the start of a relationship, the longer the marriage lasts the less weight is given to those initial contributions.

For example, if a marriage lasted 12 years and there were several children born during the relationship, the fact that one party may have had $50,000 at the start (out of a pool at separation of $1,000,000), may be given relatively little weight.

Does the Court give the same weight to Financial Contributions as to Contributions made as a Parent and Homemaker?

The Court must give contributions made as a homemaker and parent substantial and not merely token weight.

This means that in the majority of cases, where the marriage has been of average duration and one party has been a breadwinner and the other primarily responsible for the care of children, those contributions will be seen as equal.

However, the Family Court has recognised that in some cases, a party may make contributions that should be seen as having a "special" or "exceptional" quality that deserve greater recognition. These special contributions are not restricted to financial cases. They can also be made by one party through exceptional efforts as a parent or homemaker.

Big Money Property Cases

At Barkus Doolan Kelly, our accredited family law specialists have acted for clients in numerous “big money” property cases involving substantial asset pools, complex issues of valuation of assets, control of trusts and the consideration of the tax consequences of the transfer of assets. Our firm acted for the successful party, in the leading special skills/big money case decided by the Family Court: JEL v DDF [2000] FamCA1353.

How does the Court establish the value of Assets?

Parties can either agree on the value of assets, or an expert can be engaged by each party (or jointly) to report on their value.

At Barkus Doolan Kelly we can help you retain experienced experts to provide Valuation Reports on virtually any kind of business or asset. Valuations we have assisted clients on include:

• Real estate in Australia and overseas;
• Interest of a lawyer in a law firm partnership;
• Employee share options and overseas stock options;
• Minority interests in family companies;
• Superannuation entitlements;
• Restaurants and retail operations;
• Substantial shareholdings in publicly listed entities;
• Maintainable earnings and goodwill of family businesses;
• Interests in deceased estates;
• Professional practices, such as accountants, patent attorneys, valuers, medical, actuaries and similar.

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