Property division is one of the most important parts of any separation and getting it right is how you set yourself up for a strong financial future. But it’s not always as simple or straightforward as you might like. That’s why our Watts McCray team is always focused on providing you with clear, strategic guidance to help you reach a fair division of assets following your separation or divorce.
Our team of Accredited Specialists in Family Law and expert family lawyers, can assist you with everything from valuing straightforward asset pools to navigating highly complex financial structures with the singular goal of making sure you’re getting the best outcomes for your situation.
Understanding property division in divorce
In Australia, the division of property after settlement is governed by the Family Law Act 1975 (Cth) (the Family Law Act). This law applies in very similar ways to de facto couples and married couples, including same-sex couples.
The goal of property division in divorce is to reach a fair (“just and equitable”) division. But in order to do that we have to first understand exactly what forms part of the asset pool. So, the process begins with identifying the full scope of your financial affairs, as everything you own and owe is likely to be included in the asset pool.
What counts as ‘property’?
In terms of your financial settlement, ‘property’ includes all the assets, liabilities and financial resources owned by either you or your ex-partner, together as a couple of on your own, or in shares with any other person. Typically, this includes things like:
- The family home and other real estate
- Superannuation
- Businesses and companies
- Investments, shares and trusts
- Vehicles, valuables and personal items
- Mortgages, loans and other liabilities
All of these items must be identified so they can be included in the property pool.
4-step process for property settlement
One of the most common misconceptions our clients have is that their property will automatically be split 50/50 during property settlement. This isn’t always true, and it cetainly isn’t an automatic starting point.
Even though this may be the outcome for some cases, Family Law has a structured, four-step legal framework with the goal of splitting property in a ‘just and equitable’ manner based on your unique circumstances.
Step 1. Identify and value the asset pool
Family Law requires full and frank disclosure of all your financial circumstances, including assets and liabilities. This means that you will need to provide information about your joint and individual property with complete transparency. And once these items are identified they also need to be valued.
In many cases valuation will be fairly straightforward. However, in some cases you may need to get independent valuations by experts, such as for real estate, businesses, investments or specialised assets.
Step 2: Assess contributions
Once the property pool has been fully identified and each asset valued, the next step is to assess contributions. Often people believe that if you were the primary bread winner, you will be entitled to more of the marital assets. However, both financial and non-financial contributions are considered. These can include:
- Income earned or assets brought into the relationship
- Homemaking and parenting contributions
- Improvements to property
- Investment growth
- Contributions to business growth
- Asset accumulation
- The effect of any family violence on the ability of a party to make these contributions
During this process both partners’ contributions will be considered and over the entire timeline of the relationship.
Step 3: Consider Current and Future Circumstances
After assessing contributions, the next step is to look at the current and future circumstances of both you and your ex-spouse. This involves evaluating factors that may justify an adjustment to the division to make sure that it’s fair and equitable,
The Court can consider any factors that are relevant, including:
- Income and Earning capacity
- Age and health of each party
- Responsibility for children and the need to provide appropriate housing
- Access to financial resources
- Effect of any intentional or reckless, material wastage of property or resources
- Liabilities incurred by either party and the circumstances of them
- Duration of the marriage, the effect of it, and the contributions to the income or earning capacity of the other
They’ll also look at any disparities created by the relationship, such as if one person gave up work to raise children.
Step 4: Is the outcome just and equitable?
Finally, although also considered at the beginning of the process, the last step is to consider if any alteration of ownership is appropriate, as well as to look over the entire proposed division to make sure that it’s fair considering all the circumstances.
Separated couples can reach a private agreement and then formalise it via a consent order which then needs to be approved by the Court. You can also formalise your agreement through a financial agreement (colloquially referred to as a BFA), which is a private agreement recognised under the Family Law Act.
Most property settlements are resolved through negotiation or consent orders, without the need for a Court hearing. However, even consent orders must satisfy the Court that they are just and equitable and, if negotiation fails, the Court will step in to make the final decision.
If you are taking the BFA route, legal advice is essential before signing to ensure your rights and entitlements are protected, and to make the agreement “binding”.
How is property divided after separation?
Once you and your ex-partner have finalised the division of your property, whether that’s via a consent order or a BFA, the next step is to put it into action. Depending on your agreement, and your assets, your property could be divided in different ways.
For example, you may:
- Sell the family home and split the proceeds
- Transfer ownership of the home to one person, with the other receiving money or other assets in exchange
- Split bank accounts or investments so each person receives the agreed share
- Set up a splitting agreement for superannuation accounts which will take effect upon the owner reaching retirement age
- Transferring cars, businesses or other assets into one person’s name
- Paying a lump sum to achieve the agreed or ordered division
Timelines
There are strict time limits for starting a property settlement. For married couples you must begin the process within 12 months of your divorce becoming final. For de facto couples, you must start the process within two years of separation.
If you miss these limits, you need special permission from the Court to proceed and this can sometimes be difficult to obtain. However, if you find yourself in that situation, get in touch with our team. We may be able to help.
Common property division issues
Every property division is different. However, there are some common property division issues that we often see popping up.
Investment and business ownership division
Valuing these kinds of assets can sometimes be hugely challenging. Structures can be complex, the value of the business or investment may depend on market conditions or how the asset is managed and income might flow out of the business in a variety of ways.
So, business interests, companies or investment portfolios often require expert valuation and very careful assessment to determine how they fit within the property pool.
Superannuation splitting
Superannuation is treated as property for purposes of the asset pool, and so it’s often divided between parties, including SMSFs, accumulation funds and defined benefit schemes.
A superannuation split doesn’t release cash immediately, however, unless the owner of the super account is already at retirement age. Instead, typically there’s a superannuation splitting agreement or court order put into place that sets out how a portion of one person’s super will be allocated to the other (for example, a fixed dollar amount or percentage). The super fund then adjusts the member accounts in line with that split. But the money itself remains in super the super and is only accessible when the usual conditions for accessing superannuation (such as retirement) are met.
Family home and real estate
Real estate can pose a bit of a problem because typically the property can’t just be split in half. Instead, usually a former couple will need to sell the home and split the proceeds, or transfer ownership to one party who then negotiates a financial adjustment to achieve a fair settlement.
Debt and liability distribution
Debts, such as mortgages, loans and even credit cards, are divided up between you and your ex just like your assets, regardless of who incurred them. However lending criteria will still need to be met, if the ownership of the debt is to change. Of course, there are some instances that could be treated as wastage. An example might be where one partner has spent money recklessly, run up debts for their own benefit or used funds in a way that significantly reduced the asset pool.
In those situations, an adjustment may be made so the other partner isn’t unfairly disadvantaged.
Hidden assets or non-disclosure
Full disclosure is essential and required under Family Law. Any attempts by any party to hide assets, whether by actually moving them or simply failing to disclose the full value, can result in serious penalties or even having your final agreements being set aside.
Why choose Watts McCray for property division matters
For more than 40 years, Watts McCray has been one of Australia’s leading firms in family and relationship law, including divorce and separation. We provide practical, tailored legal support for your financial settlement.
- Accredited Specialists with decades of experience in both simple and complex property matters
- Experience in both straightforward and high-value, complex cases
- Strong focus on negotiation and resolution to minimise stress and avoid unnecessary litigation
- Trusted for transparent, strategic and client-focused advice
- Offices in Sydney, Parramatta, Northern Beaches, Eastern Suburbs and Wollongong
We help you understand your options, protect your financial interests and move forward with certainty.
The property division process with Watts McCray
If you’re facing a property settlement, here’s what you can expect:
Step 1: Initial consultation
We review your asset pool, financial circumstances and priorities.
Step 2: Disclosure and valuation
We identify, document and value all assets, liabilities and superannuation.
Step 3: Negotiation and agreement
We work toward a confidential and fair agreement wherever possible through private negotiation, mediation or arbitration.
Step 4: Formalising the agreement
We prepare consent orders or a binding financial agreement to ensure your settlement is enforceable and legally binding.
Step 5: Implementation
We assist with transferring property, dividing superannuation and finalising all financial arrangements.
Contact our Specialist Family Law Team
Do you have a question about family law or relationship law?
Contact us today, and a member of our team will get back to you soon.
FAQs
Property in your property pool will be divided according to the principles set out in the Family Law Act, which looks at the contributions, future needs and overall fairness. This means it won’t be an automatic 50/50 split, or even 70/30 split.
Instead, the Family Law Act follows a structured process that looks at what each person brought into the relationship, how both partners contributed over time and whether each party needs a greater share to support their future, based on their current and future circumstances.
The ultimate goal it to get to a just and equitable division.
Everything either of you owns, whether jointly or individually, or in shares with any other person, must be identified and considered. This includes homes, investment properties, businesses, superannuation, trusts, bank accounts, shares, vehicles, valuables and even debts.
Financial resources, such as trust entitlements or anticipated inheritances, might also be included. The law also requires full and frank disclosure for both you and your ex, and failing to include anything can result in penalties or an agreement or order being set aside later.
The best way to protect your property during separation is to get legal advice as soon as possible. If you’re worried about your ex transferring assets or using them in a way that could disadvantage you, get in touch with our team right away. We can help put temporary arrangements or court orders in place to prevent assets from being sold, transferred or depleted.
Acting early is the best way to protect your property during your separation and before you can finalise your property settlement.
No. Most couples resolve their property settlement through negotiation or mediation, and then have that agreement formalised through a financial agreement or a consent order. Both make the settlement legally enforceable without having to go to Court.
If you cannot reach an agreement, you may have to resort to litigation. If so, our team can help.
Full and frank disclosure is a legal obligation under the Family Law Act. If your ex refuses to disclose financial information about their assets, or attempts to hide any assets, you have avenues to remedy this. A forensic accountant can investigate assets, a valuer can provide an independent valuation of assets and your lawyer can request documents, issue subpoenas or apply to the Court to compel disclosure.
The law takes non-disclosure very seriously and the Court could impose penalties or even overturn any settlement where full disclosure wasn’t given.
You generally have 12 months from the date your divorce becomes final to begin property proceedings. For de facto couples, the time limit is two years from the date of separation. If these deadlines pass, you will need permission from the Court to proceed with your settlement.
Yes you can. You can even stay in the family home with your ex during separation though you may need to provide some additional evidence to show your separation occurred. Additionally, staying in the home could have implications for finances, tax and strategy, so be sure to seek legal advice before making any final decisions.
Accredited to deliver
Choose a team with more accredited lawyers.
Other Family Law Services
Contact our Specialist Family Law Team
You can contact our divorce lawyers to assist you with the divorce process.
Our Offices
