Understanding how family law property settlements work can bring clarity during an uncertain time. It helps you make informed decisions, minimise conflict, and protect your financial position as you move forward with confidence.
What is a property settlement?
A property settlement is about reaching a fair and practical outcome that recognises both your financial and non-financial contributions to the relationship, as well as your future needs. It provides a structured way to separate your financial lives and establish stability for the future.
In family law, divorce and property settlement are separate legal processes. Divorce is the formal end of a marriage, while property settlement focuses on how your assets, debts, and financial resources are divided. Property settlement differs from arrangements for children, which are addressed through parenting agreements or parenting orders. Spousal and de facto maintenance, as well as financial support for children, are also addressed separately.
Family law in Australia considers each person’s future needs to ensure a fair and balanced outcome. Factors such as age, health, earning capacity, childcare responsibilities, and access to financial resources all play a part. Where one partner has greater financial security or earning potential, adjustments may be made to achieve an equitable result.
When determining what is fair, both your financial and non-financial contributions are considered. Financial contributions may include income, savings, or property you brought into the relationship or acquired during it. Non-financial contributions are equally important and can include caring for children, managing the household, or supporting your partner’s career or business. These contributions reflect the shared effort that built and maintained your family’s financial position.
The Court also considers your future needs when determining a fair outcome. Factors such as age, health, earning capacity, childcare responsibilities, and access to financial resources can all influence the final division. If one partner has greater financial security or earning potential, the Court may adjust the division to reach an equitable result.
Your property settlement should recognise the contributions made during your relationship and provide both you and your former partner with a fair and balanced foundation to move forward.
When do property settlements occur?
You can begin working out your property settlement as soon as you separate. There is no requirement to be divorced before negotiating or finalising your financial arrangements. Many couples start discussing property matters early, as this can make the process more straightforward and support a quicker resolution.
There are, however, time limits. If you were married, you must apply to the Court for property orders within 12 months of your divorce becoming final. If you were in a de facto relationship, you must apply within two years of the date of separation. If these deadlines pass, you will need permission from the Court to apply, and that permission is not always granted.
What is included in the property pool?
When you begin the process, one of the first steps is identifying what is included in the property pool. This includes everything you and your former partner own or owe, whether it is in your name, their name, or held jointly. The property pool represents the total value of your combined financial position and forms the basis for reaching a fair settlement.
The family home
For many couples, the family home is the most significant and emotionally charged asset in a property settlement. It represents not only financial value but also family life, shared memories, and stability.
The matrimonial home forms part of the property pool, regardless of whose name is on the title. It makes no difference whether you purchased it before or during the relationship, or if only one partner contributed to the mortgage. What matters is that the home has been used as a shared residence and is considered part of your joint financial circumstances.
Assets and Other Financial Interests
Anything of financial value owned by you or your former partner forms part of the property pool. Assets can be held in your name, jointly, or through a business or trust, and they are included regardless of when they were acquired or whose name they are in. All assets are identified and valued so that your overall financial position can be understood. Some items, such as real estate or business interests, may require formal valuation, while others, like bank accounts or vehicles, can be valued through documentation or agreement.
In addition to these assets, there may be other financial interests that form part of your property pool. These can include shares, interests in family companies or trusts, partnership interests, unpaid entitlements such as bonuses or long service leave, and redundancy payments. Some of these interests may not be immediately accessible, but they can still be considered when determining your financial position.
Future financial benefits, such as an expected inheritance or potential entitlement, may also be relevant. These are generally treated as financial resources rather than property, but they can influence how your final settlement is structured if they are likely to affect your financial security.
Debts
Debts and liabilities are considered alongside your assets. They represent the financial responsibilities you and your former partner have, either jointly or individually, at the time of separation.
Common debts can include mortgages, personal loans, credit cards, business loans, tax obligations, and outstanding household bills. Even if a debt is held in only one name, it may still be treated as part of your shared financial position if it was incurred for the benefit of the relationship or the family.
Accurately identifying and valuing all debts is important because it provides a clear picture of your combined financial position. This allows the net value of the property pool to be determined, ensuring that the division of property takes both assets and liabilities into account.
If one of you has taken on more debt after separation, or used joint funds in a way that affects the other’s financial position, this may be considered when the overall property settlement is worked out. Accurate financial records, including loan statements and account histories, can help reduce disputes and support a fair resolution.
Superannuation
Superannuation is treated as a type of property under the Family Law Act 1975. This means your superannuation can be valued and included in the overall property pool, even though it may not yet be accessible.
Each partner’s superannuation interests are identified and valued to determine their total worth. The process of valuing superannuation depends on the type of fund and whether it is an accumulation account or a defined benefit fund. In many cases, the fund can provide a valuation directly, or a standard formula under family law can be used.
Superannuation can be split between you and your former partner through a financial agreement or a court order. A superannuation split does not result in cash being paid out; rather, it transfers or allocates a portion of one person’s superannuation to the other. The funds remain subject to normal superannuation rules and can only be accessed when a condition of release, such as retirement, is met.
If you and your former partner have superannuation in different funds or with different balances, splitting arrangements can help achieve a more balanced outcome. It is often helpful to seek legal and financial advice before finalising any decisions, as superannuation can be complex and has long-term implications for your retirement planning.
What about pets?
Pets hold a special place in many families, and deciding what happens to them after separation can be emotionally challenging. Although you may view your pet as a member of the family, the Family Law Act 1975 treats pets as property. The legal term for a family pet is companion animal. A companion animal does not include assistance animals, animals kept for agricultural purposes, animals kept as part of a business, or animals used for laboratory tests or experiments.
Most separating couples reach their own agreement about their pets without going to court. This gives you more flexibility and allows you to choose arrangements that suit your family’s circumstances. However, if you cannot agree, you can apply to the family law courts to make an order about who will own the companion animal.
From 10 June 2025, the Federal Circuit and Family Court of Australia must consider a specific list of matters when deciding what should happen to a family pet. These matters recognise the emotional bond between families and their pets, as well as their safety and care.
When considering a decision about your pet, the court may consider:
- Ownership and care: how and when the pet was acquired, who currently has possession, the level of day-to-day care provided, and who has been responsible for the pet’s food, veterinary care, and general maintenance.
- Attachment and future care: the attachment between the pet and either partner or any children, and each partner’s ability to care for the pet independently in the future.
- Safety and welfare: any family violence that exposed the pet or a partner to harm, and any history of cruelty or abuse towards the pet.
- Other relevant circumstances: any additional factor the court considers necessary to achieve a fair outcome.
There are limits to the types of orders the court can make. The court can order that one partner will own the pet, that ownership be transferred to another person who consents, or that the pet be sold. The court cannot order shared care or joint ownership of a pet.
While the court can make decisions about pets when required, reaching your own agreement often leads to a smoother and less stressful process.
How is the division of property determined?
Once the property pool has been identified, the next step is understanding how it will be divided between you and your former partner.
The division of property is not determined by a fixed formula or a standard percentage split. Instead, the Court examines the unique circumstances of your relationship. The first consideration is the contribution each of you made during the relationship. This includes financial contributions, such as income or assets you brought in, as well as non-financial contributions, such as caring for children, managing the household, or providing support that helped your partner work or study. These contributions are assessed as part of the overall effort that shaped your financial life together.
Your future needs are then considered to ensure that the outcome remains balanced. Your individual circumstances can influence this assessment, including your health, age, ability to earn an income, and the level of care you will provide for any children. If one of you is likely to face greater financial pressure or has limited earning capacity, the court may make an adjustment to reflect those circumstances and support a fair outcome.
Fairness in practice means recognising the contributions made during the relationship, addressing any difference in future financial needs, and reaching an outcome that allows both of you to move forward with stability. The aim is not to reward or punish either partner, but to reach a balanced division that reflects your shared history and supports your individual futures.
Reaching an agreement without going to court
You may be able to resolve your property settlement without going to Court. Reaching an agreement through discussion, negotiation, or mediation can make the process faster, less stressful, and more cost-effective. You also retain more control over the outcome, rather than having a judicial officer make decisions for you.
Informal Agreement
You and your former partner may reach an understanding about how your property will be divided without involving lawyers or the Court. This type of agreement can feel simple and cooperative, especially when communication is respectful.
However, an informal agreement is not legally enforceable. If one person later changes their mind or does not follow the agreement, you may have no legal recourse. This can lead to disputes in the future, particularly if one person acquires new assets, increases their income, or remarries.
For this reason, many couples choose to formalise their agreement to protect both parties and prevent future claims.
Negotiation and Mediation
If you need help reaching an agreement, you can negotiate through lawyers or attend mediation.
- Negotiation allows you and your former partner to work through the issues with support and guidance from your legal representatives.
- Mediation involves an independent mediator who helps you communicate, identify issues, and explore options. Mediation can be particularly helpful if emotions are high or communication is difficult.
Agreements reached through negotiation or mediation can be formalised through Consent Orders.
Consent Orders
Consent Orders are a legally enforceable way to formalise your property settlement without attending Court. You and your former partner submit your agreement to the Federal Circuit and Family Court of Australia, and the Court reviews it to ensure it is “just and equitable.”
Once approved, Consent Orders carry the same weight as orders made after a hearing. They protect both parties, prevent future claims, and provide certainty about how your property settlement will proceed.
Consent Orders are often the preferred option when both parties have reached an agreement and want to ensure it is binding.
Binding Financial Agreement
A Binding Financial Agreement (BFA) is another way to formalise your property settlement. A BFA sets out how your assets, debts, and financial resources will be divided and can be made before, during, or after your relationship.
Both you and your former partner must receive independent legal advice before signing a BFA. When properly prepared, a BFA is legally enforceable and can remove the need for Court involvement.
BFAs can offer flexibility, but they must strictly comply with the requirements of the Family Law Act 1975. If they do not, they may be open to challenge. A Binding Financial agreement can be more expensive than obtaining court orders because of the very specific and detailed legal advice.
What happens if you can’t agree
If you and your former partner cannot resolve your property settlement through discussion, negotiation, or mediation, you may need to ask the Court to make a decision for you.
Before you can apply to the Court, you are required to make a genuine effort to resolve your dispute. This usually involves exchanging financial information and participating in negotiation or mediation.
If an agreement still cannot be reached, either of you can apply to the Federal Circuit and Family Court of Australia for property orders. Once an application is filed, the Court will guide both parties through a series of steps, which may include further negotiations, procedural hearings, and the preparation of documents.
During this process, the Court will encourage you to continue working towards a resolution. Many matters are settled before reaching a final hearing. However, if a settlement remains out of reach, a judicial officer will make a decision based on the evidence. That decision will be legally binding and enforceable.
Protecting your financial position after separation
Early action helps you understand your financial circumstances and reduces the risk of disputes later on. One of the most important steps is gathering records of your assets, debts, income, and superannuation. Bank statements, tax returns, loan documents, superannuation statements, and any information relating to business or trust interests can all play an important role in establishing an accurate picture of your financial position.
You may also need to act quickly to prevent property or savings from being sold, transferred, or used without your consent. This may involve monitoring joint accounts, securing important documents, or seeking advice about steps that can be taken if you are concerned about assets being disposed of. In some situations, you may be able to apply for orders that stop certain financial actions until your property settlement is resolved.Independent legal and financial advice can guide you through these decisions and help you understand your rights and responsibilities. Speaking with a family lawyer early can reduce uncertainty and ensure that you take steps that protect your long-term interests. Taking a proactive approach during this stage can make the rest of the process smoother and support a fair outcome for both you and your former partner.
Family violence and property settlements
Family violence can have a significant impact on property settlements. In family law, family violence means behaviour that is violent, threatening, coercive, or controlling, or behaviour that causes a family member to feel fearful. It can take many forms, including physical, emotional, psychological, financial, or economic abuse.
From 10 June 2025, the Court must consider the economic effect of family violence when making decisions about property and finances after separation. This includes recognising that financial or economic abuse, such as controlling access to money, restricting spending, or preventing a partner from working, may constitute family violence.
Family violence can be relevant when assessing your contributions to the relationship. For example, if you were prevented from working, studying, or contributing to the household because of violence or controlling behaviour, this may be taken into account. The Court may also consider the impact of violence on your current and future circumstances, such as the need for ongoing counselling, medical care, or rehabilitation.
It is important to understand that the changes to the law do not allow the Court to punish a person for family violence within the property settlement process. Criminal charges for family violence are handled in state and territory criminal courts, and protective orders are made or amended by state or territory courts.
In the context of property settlement, the focus of the Court is on understanding how family violence affected your financial circumstances, your ability to contribute to the relationship, and your needs moving forward. This ensures that the final outcome reflects your lived experience and provides a fair path toward rebuilding your financial independence.
Arcadian Legal can help you get a fair property settlement
Finalising a property settlement is an important step in creating certainty and stability after separation. Understanding your rights, your financial position, and the processes available to you can make the experience less overwhelming and help you move forward. All decisions made by the Court must result in an outcome that is ‘just and equitable’ under the Family Law Act 1975.
If you need guidance or support at any stage, our team at Arcadian Legal can assist. Speaking with a family lawyer experienced in property settlement cases will help you understand your options and protect your long-term interests. Reaching out for advice early can make the process clearer and ensure you feel supported as you take the next steps toward a secure future.
