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Knowing your range of entitlements

If you have experienced a relationship breakdown, there are several possible routes to settle property matters with your former partner.

Commonly, parties will negotiate directly between themselves or engage lawyers to negotiate on their behalves. Once an agreement has been reached, parties will normally engage lawyers to draft a formal document which incorporates and details the terms of the agreement reached by the parties (for more information on documenting your agreement, see binding financial agreement or consent order).

To assist with negotiations (and other alternative dispute resolution methods), it is helpful to be aware of what you might be entitled to if the matter was heard at a final trial. Knowledge really is power. Knowing what your range of entitlements might be provides a good indication of whether or not the outcome you have negotiated is fair and reasonable.

Generally, once it is determined that it is just and equitable for there to be a property adjustment, then the court will adopt the following four step process:

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Step 1: determining the property pool

Firstly, the court identifies and values the net property of the parties. This includes all assets, liabilities and/or financial resources which you and your ex-partner possess or exercise control over. It is irrelevant whether it is held, wholly or partially, as follows:

  • In your name, in your ex-partner’s name, or in joint names;
  • By a trust (beneficially held) on your behalf, or on your ex-partner’s behalf;
  • By a corporate trustee, a company, or another corporate entity on your behalf or your ex-partner behalf; or
  • In the form of a superannuation plan.

If you have any specific questions about whether an asset, liability or financial resources should be included, please contact our family lawyers.

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Step 2: contributions

Secondly, the court considers the contributions each party made to the acquisition, conservation and improvement of the property pool. These contributions are categorised as follows:

  • Financial contributions made directly or indirectly by you or a party on behalf of you (for example, a relative), to the acquisition, preservation and maintenance of property;
  • Non-financial contributions made to the acquisition, preservation and maintenance of property other than by way of a financial contribution, for example by working unpaid in a family-owned business, or renovating the family home; and
  • Contributions made for the welfare of the family (including parenting and housekeeping).

Contributions are assessed at the beginning of the relationship (initial contributions), during the relationship, and in the post-separation period.

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Step 3: future needs factors

Thirdly, the court considers the impact that the relationship has had on the parties’ current circumstances. An adjustment will be made in favour of the spouse that requires more financial assistance to move on with their lives. These are commonly referred to as “future needs factors”.

  • The court will take into consideration many factors including the following:
  • The parties’ ages and states of health in relation to each other;
  • The parties’ income, property and earning capacity;
  • The care arrangements for any children of the relationship under 18 years;
  • The parties’ standard of living enjoyed during the relationship;
  • Any education and training undertaken, or that which needs to be undertaken to re-enter the workforce; and
  • The terms of the proposed orders to be made.
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Step 4: Justice & Equity

Finally, the court applies its overall discretion to ensure that the order is “just and equitable”. That is, the proposed order is fair in all of the circumstances. The court will have a discretion to make an adjustment to ensure that the outcome is fair, having regard to all the facts and circumstances of the relationship.

The court will then consider, as a final additional step, the likelihood of either party receiving an order for spousal maintenance.

To arrange a free initial consultation with one of our experienced family lawyers, and to discuss the possible outcomes moving forward, please call Ramsden Lawyer’s family law specialists in Gold Coast or Sydney on 1300 749 709.

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