Dividing Property - De Facto Separation

The Federal Circuit and Family Court of Australia (FCFCA) has the power to make orders in relation to financial matters such as dividing property, following the breakdown of a de facto relationship. Applications for property orders must be made within 2 years of the breakdown of a de facto relationship. An Application made outside of that time period, requires permission from the court.

In order for the court to have jurisdiction to make Orders in relation to property, the court must be satisfied that the parties are in a genuine de facto relationship. Section 4AA of the Family Law Act 1975 states the many factors that are taken into account to establish the existence of a legal de facto relationship.

Once a de facto relationship has been established, the court can make orders in relation to any property that the couple own, either separately, or in joint names.

How much will I receive of our property after we separate?

Determining what property you and your former partner will keep after separation is called “a property settlement”.   Your entitlement to a property settlement is not worked out by an exact formula and depends on the circumstances of your relationship. The overriding factor that needs to be considered is if the division of your and your partner’s property is “just and equitable”.

The Act and past cases provide guidance about how to determine a “just and equitable” division of property.  A number of steps to consider to determine what your entitlement may be. The 3 steps are as follows:

What property is to be divided?

If you can ask for an order for property settlement pursuant to the Act then the next step involves working out the value of what you and your partner own and what you owe money on.  This includes:

• the home;
• investment properties;
• cars;
• investments like share portfolios;
• funds in bank accounts;
• business operated by you and/or your partner;
• superannuation;
• mortgages; and
• personal loans.

Working out what you and your partner has to divide can easily become complicated as there may be a company or trust structures or interests in businesses with other people.

How did you and your partner acquire what you have?

After it is worked out what you and your partner have to divide, the next step is to work out how did you and your partner acquire it.  This includes assessing:

• what each of you owned when you first started living together?
• how did you and your partner buy property when you were together?
• who paid the mortgage and other expenses for the home and/or investment properties?
• who was responsible for caring for the home and the family?
• whether either you or your partner received any gifts or inheritances?
• how long were you and partner together?

Your and your partner’s contribution is then usually expressed as a percentage, for example 55% to you and 45% to your partner.  It is important to note that there is NOT an automatic assessment that you and your partner’s property is to be divided equally (50% each) just because you and your partner were in a de facto relationship.

Are there any other factors to take in account?

The next step is to see if there are any other factors that should be taken into account.  These factors include:

• who has the care of any children of the relationship under the age of 18;
• the income of you and your partner;
• the heath of you and your partner; and
• the amount of child support paid by you or your partner.

These factors may change the percentage on how you and your partner’s property is to be divided.

If you would like legal advice on dividing property or any other legal matter contact Armstrong Legal on 1300 038 223 or send us an email.