Property settlement: always remember the four step process
This is aimed for people who are or were married and therefore come within the Family Law Act. It also applies for defacto and same sex couples in Quuensland, which largely copied the parts of the Family Law Act to do with property settlement.
The Family Court has said that there is a four step process to engage in when considering property settlement.
Step 1: Identify and value the property pool
This sounds basic, but so often people forget that you need to do this first before you can work out how to cut the cake. Is it a chocolate cake or a delicate sponge? A cupcake or a Bavarian torte?
It is always helpful when going to your lawyers on the first occasion to try and identify what the property, superannuation and debts are and how much you think they are worth.. If you can set them out in a legible table, all the better.
Often there can be arguments about whether or not property is owned by a party, and how much it is worth. If these issues can be sorted out, then it is often easier (and sometimes very easy) to settle.
Step 2: Assess the contributions
These are the contributions to the maintenance, acquisition and conservation of property, the care of any children and homemaking. The contributions can be direct or indirect. For example, an indirect contribution by you might be if your parents gave you $100,000 (lucky you!).
The assessing of contributions is not an accounting exercise but the weighing up of various competing factors. As the Family and Federal Magistrates Courts have said repeatedly- “each case is unique”.
These are sometimes caled “section 79 factors” as this is the section of the Family Law Act that applies to contributions.
Step 3: Consider if future factors apply, and if so how much
It is one thing to say that the contributions determine what is fair or not, but often an adjustment will be made to the amount a person might receive based on one of the stated future factors. For example, an adjustment may be made in favour of a husband because the wife is likely to inherit $1M within the next couple of years. Another example is that an adjustment is made in favour of a wife because she has the care of young children.
These factors are often called “section 75(2) factors” because that is the section in which they are found under the Family Law Act.
Step 4: coming up with a fair result
Finally, the court is required to come up with a result that it considers is just and equitable, or fair. This may mean an adjustment of the division that it has worked out under steps 2 and 3.