Splitting your assets when separating from your ex
The breakdown of a relationship is hard enough. And dealing with dividing assets is not an easy task under the best of circumstances. Here, we’ll walk you through the property settlement journey, put you in contact with experts and cover everything from debt to superannuation.
How assets are divided in a separation
Working out how to divide your money and property after a relationship breakdown is stressful. You’ll be making a lot of financial decisions and there may be a lot of paperwork to go through while also making sure the asset division is fair to you and your ex.
In Australia, that doesn’t automatically mean a 50-50 split, no matter the length of the relationship. There are many factors to consider, and getting accurate legal advice is critical.
Important things to note about asset division
It’s important to note that a division of property of the relationship under Australian law includes adjusting not just assets and debts, but also superannuation, foreign assets and any foreign pension owned by one or both people.
- Your debts are part of the asset pool. Whether they are in your joint names, or in separate names, they need to be taken into account during a matrimonial or de facto separation in any division of property.
- There are statutory time limits constraining you as to how much time you both have to finalise your property settlement.
- No one can tell you exactly how your property should be divided. Every situation is different. It is important that you seek independent legal advice as to your property settlement entitlements.
- Superannuation is considered property under family law in Australia
- You also need to outline what you have agreed to do about how your finances will be managed by both of you after separation (if you can agree regarding that). For example, what will happen with any property, if spousal or child maintenance will be also paid and to whom, or whether maintenance will be a regular payment or a lump sum payment. If you cannot agree, you should seek the help of a lawyer.
What is considered property in family law?
The property pool consists of no less than:
- the family home
- cash not in bank accounts
- money in bank accounts
- insurance policies (if they can be cashed in for money)
- family trusts – any beneficial interests (eg income, investments etc) you or your ex might have as a result
- any trust in which a person is a trustee or beneficiary, in addition to family trusts (eg. business trusts, investment trusts, benefits under a testamentary trust)
- superannuation and foreign pensions/superannuation
- inheritances and gifts
- Investments (eg in businesses, cryptocurrency)
- debts including mortgages, loans, credit cards and personal debts
- collections (eg. antiques, art)
- and financial resources (eg. long service leave accrued)
Working out your property settlement
Property settlement is different for everyone. The way it will be shared depends on individual circumstances, and there is no 50-50 split rule.
In Australia, the Family Court has set out a four-step process for determining the percentage of the combined property each party should get. This process is:
- Ascertaining the property, liabilities, superannuation and financial resources of the relationship
- Assessing the financial and non-financial, homemaking and parenting contributions of each person
- Considering the various future needs of each person and making adjustments for such factors
- Determining whether the overall division (having established 1 – 3 above) is just and equitable to each party in all of the circumstances
At the end of this process, you might each end up getting 50% of the property pool, but more often than not it varies greatly because each case has its own unique set of circumstances.
Going to court to divide assets
You need to be aware that going to court is costly, time-consuming, immensely stressful and more often than not results in a decision that neither you nor your ex is seeking.
But if you and your ex can’t agree on how to divide property, and mediation hasn’t helped, in Australia, the court can make Orders upon Application by you.
What is the average split in a divorce settlement in Australia?
As per law in Australia, there is no strict formula for a divorce or de facto property settlement. Each case is different.
How long after separation can you apply for property settlement in Australia?
In Australia, you must apply for a property settlement:
within 2 years of the date of separation.
How much does it cost to get a divorce or separate?
A divorce is separate from reaching a property settlement. A divorce is simply a formal legal order that the marriage has ended and you are no longer husband and wife.
Most law firms charge around $1000 for a divorce with no children. If children are involved, it will cost around $1,500 as your lawyer is required to appear in court to confirm there are adequate arrangements in place for the care and welfare of the children.
If you don’t use a lawyer, you will still have to pay the $900 filing fee (unless you are a concession card holder).
Can my partner get the car I bought after separation?
It is unlikely your car would be transferred to your ex.
But despite purchasing it after separation, you should remember that if you keep your car, its value is part of the percentage of the property pool you keep at the property settlement.
Can my ex spend all our money and sell our property?
If you have money in joint accounts, speak to your bank about requiring joint signatures for any significant transactions. You can note to them that you are separated.
For everything else, seek legal advice immediately. Lawyers can help prevent these situations from happening.
Am I responsible for my ex’s debts in a divorce or de facto separation?
Technically, you are legally responsible for the debt being serviced or repaid only if the debt is in joint names.
Despite this, all debts form part of the property pool for division between you both; it is unusual for debts to be transferred from one partner to another as a result of property settlement.
What if the debts were accrued after we separated?
All debts, whether they existed before or after separation, form part of the property pool up until the day of property settlement.
Does superannuation get divided after separation?
Superannuation is considered property in Australia and can be divided; the amount of superannuation that may be transferred by the Trustee of the Superfund to the other party depends on several factors.
What documents should I take with me when seeing a lawyer about property matters?
Primarily, you should take a list of your and your ex’s sole and joint assets, liabilities, financial resources and superannuation.
You should also list down:
the amounts and dates of any monetary gifts or inheritances either of
- each of your incomes for the last 3 years
- Any qualifications either of you has
- the names of any businesses and whether they are profitable
if there are children (and any special needs the children have), the
children’s ages and living arrangements and whether and/or when those
are expected to change
- a written list of your combined monthly expenses
a list of your expected sole monthly expenses if you were to live alone
(with or without the children)