Author

Alan Weiss

27th March, 2020

Alan Weiss developed aussiedivorce.com.au after he experienced himself how devastating divorce proceedings can be. I witnessed firsthand my own future security, and that of my familys, being destroyed by acrimonious and costly divorce litigation. I created aussiedivorce.com.au to help people avoid an experience like this and lose thousands of dollars. Instead the aussiedivorce.com.au system will assist them in getting on with their lives.

The court’s process for deciding a property order may not seem straightforward at first glance

Stanford (an important family law case) said that property orders should be “just and equitable” to all parties. A property order determined by a court changes a property’s legal and equitable rights, and it can also affect third parties.

The court identified three “core propositions”:

  • Before making a property settlement order, the court must identify the legal and equitable interests of the parties involved.
  • Family law does not give way to any special “right” to a property law settlement.
  • The determination of  “fair and impartial” is not solely dependent on the assumption that one party or another has the right to have the property; rather, it depends on all the situations of the parties.

Four steps to a successful property order

In the first step, the court (or the couple) will look at relevant assets and liabilities and how much they are worth. Next, the court looks at financial and non-financial contributions (like being a stay-at-home parent), along with bad contributions like gambling or abuse.

After this is finished, the court can make a decision based only on the contributions of each person in the relationship. It’s good to remember that this will likely change during future steps.

The third step looks at the future needs and resources of each person in the relationship––things like health, the ability to work in the future, and things that may stop them from bringing in an income.

Once this is decided, it’ll be used to adjust the decision from the second step. Lastly, everything is checked for fairness in Step 4 before a final order is made.

Different approaches to distributing assets

For negotiation to be successful, both parties have to be upfront with any relevant assets and liabilities. There are three main ways to distribute the assets.

The first is distributing each asset one by one, or by one category at a time. This is formally known as the asset-by-asset method. The second method is the global approach, both parties agree on how much assets and liabilities are worth and then figure out how to split the pool––once after determining contributions, and again at

Step 3.  The third way to decide who gets what the two-pool approach is, and it’s used when there’s a pension fund that makes the global approach a bad option.

The asset-by-asset approach is often recommended if you and your former partner can agree on low-value assets and remove them from the property pool. Additionally, this approach may work if the relationship has been short.

Other possible scenarios include a small property pool, a big difference in how much each person contributed to the relationship in the beginning, or the parties just wanting to do it that way.

Lastly, if you and your partner never purchased joint property during the relationship (or purchased property close to separation), this approach could be your best bet.

This may seem like an easier approach, but it can be hard to reach a fair result while using the asset-by-asset approach. It can also be difficult to fairly apply Step 2 and 3 when you’re looking at individual assets instead of an entire pool.

The global approach

When using this approach, both parties agree on how much assets and liabilities are worth and then figure out how to split the pool––once after determining contributions, and again at Step 3.

At Step 2, for example, in considering factors of contribution alone, you may decide on a 50–50 split. At Step 3, after consideration of future resources and needs, you might give an additional percentage to the person responsible for the care of three minors and a smaller capacity for future earning.

After the negotiation of the final percentage split, the parties are left to work out which assets will comprise the shares. There is usually a variety of ways to divide the shares.

Lawyers and courts often favour the global approach because it simplifies negotiation and ensures general fairness.

The two-pool approach

The two-pool approach (used in Coghlan v Coghlan (2005)) is a method consisting of two pools of assets; one of these pools contains only superannuation.

The two-pool approach is commonly used when a pension fund’s value is disproportionately large when looking at the whole value of the pool, the superannuation is not set to mature for a long time, and the value of investments to the fund made during the relationship makes up a small amount of the whole fund.

The importance of agreed assets, liabilities, and values

To negotiate who gets what, the parties be coming from the same direction. Before negotiating who gets what, you must reach an agreement on the values of respective belongings and debts, as well as the total value of your assets.

Step 1: Identify and value belongings and debts

The family court process in deciding a property order

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