PROPERTY SETTLEMENT

 

Property Settlement: How much am I entitled to / What will I have to pay

 

The most common questions people will have about property settlement after separation or divorce is:

  • How much will I get from the Property Settlement;


  • How much do I have to pay my former wife / husband / partner;

  • How can I get more from the Property Settlement;

  • How can I pay my former spouse as little as possible when dividing our property.

What is involved and included in a Family Law Property Division

 

What is a Family Law Property Settlement and what does it involve?

After you separate at some stage it will be necessary to divide your property through a property settlement.

Property settlement includes assets, liabilities and financial resources. 

Financial Resources include Superannuation and pension interests. 

The definition of ‘property’ is very wide.  It will include almost anything of value. 

Property Settlement includes assets and financial resources such as (amongst other things):

  • jointly owned assets;
  • property owned in the name of one party only;
  • superannuation;
  • business interests;
  • an interest in a company;
  • family trusts as well as other Trust interests;
  • Funds or Interests over which a party has influence or control;
  • Prospective entitlements (in some cases);
  • assets owned prior to the commencement of the relationship;
  • assets acquired the relationship;
  • assets acquired after Separation.

As well as dividing the assets and financial resources, property settlement also involves the division of any liabilities. 

Liabilities will include debts, loans, tax and stamp duty obligations. 

All liabilities are considered whether they are in joint names or whether they are in the name of one spouse only. 

 

How much will you get / What will you have to Pay

 

Contrary to popular belief, in Australian law there no presumption or starting point that property should be divided between the parties on an equal (50% / 50%) basis. 

There is not any rule of thumb as to how Courts will divide the property between the parties. 

The Court will look at the particular facts of each case on its own merits and then make an Order they consider appropriate for the circumstances of that case. 

An Order made by a Court is usually framed in terms of the percentage of the total property pool that each party will receive. 

You may have heard of a friend's property settlement being 60/40, 60% to the wife and 40% to the husband.

This means if their net property pool (total assets & financial resources - total liabilities) was $800,000, then the wife would have received 60% of that being $480,000 and the husband would have received 40% being $320,000.

The  Court will usually specify which assets each party will retain, whether any assets must be sold so that the proceeds can be divided and whether a party needs to pay a “cash adjustment” amount to the other party, so as to achieve the stated percentage property division. 

 

Example of a Property Settlement Division

 

In the example above, say the net property pool is $800,000 made up of assets, financial resources and liabilities of the couple as being:

  • House worth $600,000 with a joint mortgage of $300,000 so net $300,000
  • Investment Property worth $500,00 with a joint mortgage of $300,000 so net $200,000.00
  • Toyota Prado 4WD Motor Vehicle worth 50,000
  • Holden Astra worth 20,000
  • House and Contents of Matrimonial Home of $5,000
  • Husband's Superannuation of $160,000
  • Wife's Superannuation of $65,00

The Court may divide that property pool 60%/40% in the wife's favour by:

  • The Wife receiving her 60% split of $480,000 made up as:
    • The former matrimonial home worth $600,000 with the mortgage of $300,000 being refinanced into her sole name so receiving $300,000 net;
    • House and Contents of Matrimonial Home of $5,000
    • Holden Astra worth 20,000
    • Wife's Superannuation of $65,00;
    • To make up the balance to total $480,000 the Wife will need to receive from the Husband $90,000 in either Cash (he will need to take out a loan to pay her acquiring an additional liability) or Superannuation (into her Superannuation account) or a combination of both, which could be done in a few different ways for example:
      1. Receiving a cash adjustment payment from the husband of $90,000 (via a loan he takes out); or
      2. Receiving a Superannuation Split into her Superannuation account from the Husband's Superannuation of $90,000 so that her total Superannuation is then $155,000 and his is then $70,000; or
      3. Receiving a a cash adjustment payment from the Husband of $50,000 (he taking out a loan for that amount) and also receiving a Superannuation Split into her Superannuation account from the Husband's Superannuation of $40,000 so that her total Superannuation is then $105,000 and his is then $120,000.
  • The Husband receiving his 40% split of $320,000 made up as:
    • The Investment Property worth $500,000 with the mortgage of $300,000 being refinanced into the Husband's sole name so receiving $200,000 net;
    • The Toyota Prado 4WD Motor Vehicle worth 50,000
    • The balance in one of two ways either:
      1. Keeping his Superannuation of $160,000 and getting a loan to give a cash adjustment payment to his wife of $90,000; or
      2. Keeping in his Superannuation $70,000 and splitting $90,000 into his Wife's Superannuation account; or
      3. Keeping in his Superannuation $100,000, splitting $40,000 into his Wife's Superannuation account and getting a loan to give a cash adjustment payment to his wife of $50,000.

 

Property Settlement - More Information

 

You can read more about how Superannuation is split between married or de facto couples in a property settlement in the fact sheet How do I get some of my partner's Superannuation / Giving some of your Superannuation to your spouse in Property Settlement.

To understand what you may be entitled to in your property settlement or how much you may have to pay, read our fact sheet How do I work out how much I will get - how is Property Division decided – The 4 Steps.

You should also be aware of the time limits for doing your property settlement which is set out in the fact sheet What is the Time Limit to do a Property Settlement.

We have 16 fact sheets on different issues in Property Settlement. To see a list of all the fact sheets so you can read everything you need to know, click here to access our Property Settlement Section Page.

 

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Content By:
Michelle Beatty
MRB LAW

Other Questions answered in the Property Settlement Section

 

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