Have you recently separated from your partner? Do you have property? The Family Law Act provides a pathway for prospective parties and the Court to follow when determining how to divide property.
The first step is for value to be given to the property and any liabilities which the parties may have. This can be agreed between the parties or a valuer can be appointed by the parties to determine an appropriate value. A common misconception of parties in family law matters relates to the value of what can be conveniently described as “household contents”. Generally speaking, these items are valued at auction value and not at replacement or insurance value.
The second step is to determine the “contributions” which each party has made to the property of the parties. Here, the court looks at things such as what property each party brought into the relationship, any windfalls (lottery wins, inheritances, damages awards, gifts and so on) contributed by either or both of the parties, and even more importantly, how was each such contribution used during the relationship (including as an income earner, homemaker and care provided for children) and any conduct by the parties to increase or reduce the value of the asset pool.
The third step is to look at what are the “future needs” of each of the parties. Section 75(2) of the Family Law Act sets out a list of nineteen considerations to assist in determining future needs. They include matters such as age, health, capacity for employment, whether care is being provided by that party to others including children of the relationship, the maintenance of a reasonable standard of living, the effect of marriage upon earning capacity and a number of other factors.
The fourth step involves “stepping back” to ensure that the proposed arrangements are just and equitable in the circumstances.
