Top 5 Questions About Property Settlements

Going through a separation or divorce can be emotionally and financially overwhelming. One of the most important legal processes to understand during this time is property settlement in Australia. This process involves dividing assets, liabilities, superannuation, and other financial interests between separating parties. Whether you’re in a marriage or a de facto relationship, knowing how property settlement in Australia works can help you make informed decisions and avoid costly mistakes. In this article, our experienced family lawyers answer five of the most frequently asked questions about property settlements, providing clarity on your rights, entitlements, and the steps involved in achieving a fair and legally sound agreement.

Do both parties have to agree to separate?

In Australia, the law does not require both parties to agree in order for a separation to be legally recognised. Whether you are in a marriage or a de facto relationship, one person can initiate the separation without the consent of the other. Legally, separation occurs when one party communicates a clear intention to end the relationship. This can be done verbally, in writing, or even by actions that clearly show the relationship has ended.

Once separation is communicated, it becomes an important legal milestone especially in the context of initiating a property settlement in Australia. This declaration of separation triggers the timeline for certain legal processes, including the division of assets, liabilities, and superannuation.

Even if the other person disagrees with the decision to separate, their lack of consent does not invalidate the separation itself. The family law system in Australia acknowledges that relationships may end unilaterally and offers a framework to ensure that property settlement in Australia proceeds fairly, regardless of how the separation began.

After separation has been established, the next step is to determine the size and composition of the asset pool, which will form the basis for your property settlement negotiations or proceedings.

What comprises an “asset pool” for the purpose of a property settlement?

All assets, liabilities and superannuation of the parties must be disclosed in property settlement matters, regardless of whether the asset is one party’s name or both. Assets held outside of Australia must also be disclosed.

After the asset pool has been determined, then it may be divided between the parties.

We are married so our asset pool gets divided 50/50, right?

It’s a common misconception that marriage automatically entitles both parties to an equal split of assets following separation. In reality, property settlement in Australia is not based on a fixed 50/50 formula. The Family Law Act takes a much more nuanced approach, considering a range of factors to determine what is just and equitable in each unique case.

There is no legal presumption of a 50/50 asset division simply because you are, or were, married. Instead, the courts look closely at the overall financial and non-financial contributions of each party throughout the relationship, as well as their future needs. This is done to ensure the outcome of the property settlement in Australia is fair and reflective of each person’s circumstances.

• The value of the net asset pool;
• The length of the parties’ relationship, being from the time that the parties commenced living together and separated on a final basis;
• The financial position of the parties at the time of them commencing cohabitation, being the values of assets, superannuation and liabilities contributed by each party to the relationship;
• The financial contributions made by each party during the relationship, such as the income earned, inheritances and payouts received;
• The non- financial contributions made by each party during the relationship, such as duties around the home including cooking and cleaning and care responsibilities for children;
• The ages of the parties;
• The individual health needs currently of the parties and the anticipated impact of those needs to a party in the foreseeable future;
•  The earning capacities of each party;
• The ongoing care arrangements for the children; and
• Any trust structures or overseas assets that provide a financial benefit to either party.

Each of these elements plays a vital role in shaping how assets are divided. If one party has a significantly higher future earning capacity or if the other party is the primary carer of children, this may lead to an uneven but fair division of assets. Ultimately, property settlement in Australia focuses on achieving a just outcome rather than an equal one. Engaging a qualified family lawyer can help you assess your entitlements based on your individual situation.

How long do we have to wait to divide our assets?

The process of negotiating and formalising of agreements relating to the division of property can occur immediately upon separation. There is no requirement for you to delay arrangement of a property settlement.

However, it is important to note that there are time limitations within which you must seek a property settlement. They are as follows:

For a defacto relationship:- You have 2 years from the date of your separation; and
For a marriage:- You have 1 year from the date that a divorce is granted

Within these time limitations, it is best practice to have either:

If you do not comply with these time limitations, you need to the permission of a judge of the family courts to allow you to proceed with an application to seek a property settlement from your spouse.

I have told my partner that I want to separate. What’s next?

Communicate your separation to a third party.

Once you’ve made the decision to separate and clearly communicated this to your partner, the next steps are crucial especially if you’re preparing for a property settlement in Australia. Although there’s no legal requirement to notify a third party, it’s wise to create a record of your separation for future reference. This can be as simple as a diary entry noting the date and nature of the discussion or an email or message confirming the separation. This kind of documentation can become important later, particularly when determining timelines for filing or finalising property matters.

If you’re not ready to inform friends or family members, documenting your separation in writing can still serve as useful evidence should questions about the timing arise during your property settlement in Australia.

Take copies of and collate important financial documents.

The next essential step is to begin gathering and securing important financial documents. In many relationships, one party handles the majority of financial matters, leaving the other with limited insight into the couple’s overall financial position. Under the Family Law Act, both parties have a legal duty to provide “full and frank disclosure” to each other. This obligation is central to ensuring a fair and transparent property settlement in Australia. You should collect and safely store documents such as:

• The balances of bank accounts in their sole or joint names;
• The balances of any superannuation accounts in their names;
• Evidence of any debts or liabilities in their sole or joint names;
• Details of any vehicles, boats, motorcycles in their sole or joint names;
• Insurance policies in their sole or joint names.

Although both parties have this obligation upon separation, if you are considering separation or have decided to separate, it is prudent to familiarise yourself as best you can with your joint finances to gain a better understanding of your financial position.
The types of financial documents that are important to family law matters include but are not limited to:

• Bank valuations of residential or commercial properties;
• Taxation documents including Individual Tax Returns and Notices of Assessments;
• Bank statements;
• Superannuation statements;
• Credit card statements;
• Personal loans;
• Share portfolios;
• Registration documents that include year, make and model of vehicles;
• Insurance policies;
• Documents that relate to what each party owned at the time of the parties commencing to live together; and
• Documents that relate to any inheritances or payouts received by either party

If you have access to this documentation, take copies of the documents and keep them in a safe location. Familiarising yourself with these details early will place you in a stronger position when it comes time to negotiate or formalise your property settlement in Australia.

If you do not have access to any financial documentation, there are other ways you can obtain information for property settlement in Australia, such as:

• If you are unaware of the mortgage owing on your property and you are a borrower on the loan, contact your bank lender to help you to understand the values and structures of your loans.
• Contact a local real estate agent to obtain an appraisal of the market value of your property.
• Write off to your spouse’s superannuation fund under the Family Law Act using a Form 6 and Superannuation Information Request Form to obtain a valuation of their superannuation balance. You could also do this to obtain a valuation of your own superannuation account.
• Keep an eye on the post and make note of any financial institutions sending correspondence to you or your partner. You cannot open any mail that is not addressed to you, but you can keep a journal of the different banks or financial institutions writing to your partner.

Make an appointment with a solicitor who specialises in family law for preliminary advice.

Discussions about the division of assets and household bills often occur shortly after separation. It therefore important that you are informed about the processes and your likely entitlements under the Family Law Act so that you can make informed decisions when negotiating with your spouse about such matters.

When dealing with property settlement in Australia, we recommend that you obtain independent legal advice from a solicitor that specialises in family law as soon as possible after separation, even if you remain amicable with your spouse. Your appointment with a solicitor is confidential and there is no obligation for you to seek further advice or assistance thereafter. Our experienced team at Queensland Law Practice – Family Law division has the necessary skill set and experience to guide you through the ‘sometimes complicated’ Property Settlement and Asset division process. We also offer discount rates on initial consultations to help identify where you are in the process and help you get to where you need to be.

Our experienced team at Queensland Law Practice – Family Law division has the skill set and experience to guide you through the ‘sometimes complicated’ Property Settlement in Australia and Asset division process. We also offer discount rates on initial consultations to help identify where you are in the process and help you get to where you need to be.