Once a de facto or married couple separate, they will usually need to go through the process of a property settlement. This is to work out how their assets and liabilities will be distributed. This process involves 4 steps:

Step 1: Identify the property pool. List all assets and liabilities and a second hand, real market value for each item, including houses, cars, shares, bank accounts and superannuation.

Step 2: Consider the contributions of the parties, including financial (for example, by way of income or an inheritance) and non-financial (for example, if one person spent a lot of time renovating a home to increase its value). Contributions towards the family, such as completing the housework and caring for children, are also considered.

Step 3: Consider the future needs of each party. At this step, each person’s age, state of health, earning capacity and their future obligations to care for dependents, are some factors that are considered. This step is to work out whether one person may need more of the property pool than the other, as they have greater future needs.

Step 4: It must be determined whether the agreement is ‘just and equitable’ (i.e. fair).

Regardless of whether people reach their own agreement, or whether a Judge is required to make a determination, the above steps are applied. If you can reach an agreement, the agreement should be formalised into Consent Orders. Consent Orders will protect your assets in the future and provide benefits such as a stamp duty exemption if you are transferring a home.

Every case is different. It is important that anyone going through a property settlement obtains independent legal advice, specific to their circumstances, even if an agreement has been reached.