Property Settlements Among Spouses

Property Settlements Among Spouses

Q & A

Property settlement is an important consideration for separating parties. Naturally, those involved will have various questions and concerns that are both general and situation specific. While the questions and answers are unique to each case, we have identified some common questions that are often raised by spouses, based on our vast experience in the field. The comments below are general in nature to help determine the best pathway to an advantageous property settlement.

Q1. What is the most stress-free method of settling marital property?

Entering into a Prenuptial Agreement before entering into a de facto relationship or getting married, or during a marriage, can be extremely useful in the event of separation.

However, if there is no Prenuptial Agreement, the most common and stress-free way pathway is to enter a property settlement through Consent.

If parties can reach a settlement through negotiation, the law affords two pathways to formalize such outcomes. Parties can choose to either submit consent orders to the Federal Circuit Court or enter into a Binding Financial Agreement (BFA).

Q2. What is the guiding principle for the court in deciding a property settlement among former spouses?

If the parties are unable to reach a property settlement by consent, they may apply to the court to hear the application for property settlement. The guiding principle for the court, is to achieve a settlement that is just and equitable for both parties. The focus is upon what is just and equitable on the facts of each individual case.  The court starts with all properties (held individually or jointly by spouses) in a common asset pool, and then considers factors for adjustments such as contributions, maintenance and future capacity.

Q3. When can a spouse or partner get a property settlement?

Married couples do not have to wait for the divorce as in the Australian legal system, property settlements can be formalised without applying for divorce. However, de factor couples have two years from the date of separation to work out their property settlement.

It is always prudent to have a property settlement agreed or an application for property settlement be made to a court before applying for a divorce as there is a strict time limit for property settlement after divorce. Once you are divorced you have only 12 months to resolve property settlements or to start court proceedings for property orders.

Q4. Should you disclose all your properties in a property settlement?

The Family Law Act 1975 as well as the Family Law Rules 2004, obliges the spouses seeking property settlement in Australia to make full and frank disclosure of all assets, liabilities and financial resources wherever situated, without any exception. This enables the opposing spouse to be aware of all assets in your individual name or in joint names and the value of those assets. Both partners must disclose to each other property/assets in which they have a financial interest.

There are serious consequences for failing to disclose the required information. If the non-disclosure is brought to the notice of the court after court proceedings are finalised, the non-disclosure may be grounds for setting aside the previous property orders and making a new order.

Q5. What is included in an Asset Pool?

An asset pool includes all assets including initial contributions by parties to the marriage or relationship.

It is difficult to give an exhaustive list, but it generally includes the following:

  • All assets owned by either party prior to the formal marriage or entering of the de facto relationship.
  • All assets accumulated during the marriage or de facto relationship, and
  • At the court’s discretion, all assets acquired post-separation (but before a final property settlement)

In the context of Australian family law, the following assets (not a complete list) have generally formed the common assets:


  • Matrimonial home (family home)
  • Investment properties
  • Vehicles such as motor cars
  • Superannuation
  • Savings of every description
  • Stocks and shares
  • Business interests including investments
  • Household items such as furniture
  • Personal property/belongings of value such as gems, jewellery, paintings
  • Debts


Liabilities are considered in arriving at a net valuation of the property asset pool.

Q6. What does initial contribution by each party mean?

This means what each party brings into the relationship, be it a significant asset such as real estate, liquid assets, or any other asset. There is no specific formula that a court can apply in assessing the contributions made by parties.

In a short relationship, the initial financial contributions may be regarded as more substantial in favour of the contributing party, as it is less likely that there has been a total merger of lives and assets. Further, there is less likelihood that there are substantial joint contributions.

However, in a long relationship, the initial contributions are given less weight as the relationship has allowed for the merger of all financial and non-financial contributions. Importantly, the weight given to different contributions is heavily dependent on the facts of each case.

Q7. What happens to joint tenancy ownership of Property?

A property can be registered by two or more persons, which is called joint tenancy. If one of the registered proprietors (a joint tenant) dies, then the property is automatically transferred to surviving registered proprietor/s.

Alternatively, there is a different ownership model called “Tenants in Common” which means each registered proprietor owns a share in the property. On the death of a registered proprietor, his/her share does not transfer to the surviving registered proprietors. The will of the deceased determines the outcome of his/her share in property.  A tenancy in common permits each owner to pass their share of the property to any person they select.

Pending property settlement in separation, parties may consider severing the joint tenancy.  To sever the joint tenancy a spouse or de facto partner does not need the consent of the other partner, as it only converts the property to being held as Tenants in Common.

Q8. What is the impact of a separation on an existing Last Will?

In some jurisdictions, divorce will automatically render your Will revoked. In others, divorce will simply revoke your former spouse as your executor, or any gift left them. Separation from the spouse does not have any impact on the terms of the Will. Divorce requires at least 12 months of separation, which may be a matter of concern for some spouses and partners.  If you fail to update your Will post separation, pending divorce and the partner dies, in effect, your former spouse will be entitled to gifts distributed from your Will or subject to the intestacy laws. For this reason, when a spouse separates, it is always advisable to review and update the Will without waiting for divorce or property settlement

Separation from your de facto partner does not have any impact on the terms of your Will.  Any provision in the Will in favor of a former de facto partner remains in place.

Another aspect to remember is that when you become legally married, any previous wills that you had made are automatically cancelled.

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