Property Settlement: Division Of Assets After Divorce & Separation

When facing the end of your marriage or relationship, it can often be a confusing and emotional time.

Regarding property settlement, there are many misleading myths out there that can leave you worried and mislead.

Our property settlement lawyers in Sydney have heard them all. We have put together a guide for you, to help you understand what is involved in dividing your property after a divorce.

Your Property Settlement Family Law Guide

What Is Property Settlement?

The term “property settlement” describes the division of property between two partners when they separate.

“Property” can cover everything from the family home and investment properties, to cash in the bank, your car, investments, and superannuation.

Read more about what is considered property.

Property Settlement Agreement

Property Settlement Process: How The Court Divides Assets & Finances

The 4 Steps The Family Law Court Uses To Decide Property Divisions

Property Settlement Process In Australia

Step 1: Establish The Matrimonial Asset Pool

The “Matrimonial Asset Pool” is all the property owned by you and your partner. The property can be under both names, or under your individual names.

To establish the property pool, the Court will consider:

  • What assets and financial resources you and your partner have.
  • The value of each item.
  • What is owed for each liability

Step 2: Assess Contributions To The Asset Pool

The court will assess what contributions you and your former partner have made to the asset pool. They will assess:

  • Direct Financial Contributions Of Each Partner. May include lump sum payments, wages, gifts, inheritance, and any assets or money bought into the relationship.
  • Non-financial Contributions Made By Each Partner. May include parenting, renovation work around the house, making household items etc.
  • Any Contributions Made Since Separation.

Step 3: Considering The Future Financial Needs Of Each Partner

The court will consider many things when determining the future needs of each party. This can include:


Age and health of both parties.

Financial resources and assets of each partner.

Whether each partner is eligible for a pension, allowance or other benefits.

If care or support is needed for children.

If there is a need to protect a partner who wants to continue their role as a parent.

Necessary commitments of each party to support themselves, children, or other dependents.

What is considered a reasonable standard of living.

Whether the property settlement will impact a party’s ability to pay back a creditor’s debt.

Income and income earning capacity

Financial circumstances if a party has entered a new de facto relationship.

The details of any binding financial agreements.

Paid or potentially future child support payments.


Any other facts or circumstances which the Court will need to be taken into account

Step 4: Evaluate The Effect Of A Proposed Property Settlement.

The court will assess what impact the Court Order will have on each party including:

  • What is “just and equitable”. The court tries to achieve what is considered a fair distribution of finances, assets, and liabilities.
  • Determine who gets what. The Court will decide who will get a specific assets and liabilities.

What Assets & Financial Resources Are Included In Property Settlement?

There are many things considered as “property” in a divorce settlement. This includes both assets and liabilities that are owned either by one or both parties, a family trust or a family company. Property in a settlement can include:


Jointly owned assets.


Family trusts.




Any business assets.


Any interest in a company


Assets owned by one partner only.


Assets acquired after separation.


Property entitlements (in some cases)


Any assets owned before the relationship commenced.


Assets including motor vehicles, furniture or jewellery.


Any funds or interests that a partner may have influence or control.


Real estate including investment properties and the family home.


Money held in bank accounts or as cash.


Assets acquired within the relationship.


Insurance Policies.






Other investments.


Any liabilities such as debts, loans, mortgages & tax obligations

All liabilities and assets are considered whether they are in both parties’ names or whether they are in the name of one spouse only.

Do I Need Legal Advice?

It is always a good idea to speak to a lawyer to make sure you understand the process and what you are entitled to.

Situation you should consider getting legal advice includes:

  • When you about to start negotiations to divide assets and finances.
  • Before you sign any property settlement agreements.
  • When you can’t agree with your former spouse about how to divide assets and finances.
  • If you are considering to work out an agreement by attending family dispute resolution.
  • If you are applying to Court for property orders.

How Do We Know What Our Property Is Worth?

There is no set rules determining how assets and debts should be valued. You and your former spouse can agree to value assets as you see fit when working out a property settlement.

In the worse case scenario where you and your partner cannot agree on an item’s worth, you can also hire an expert valuer to provide a sworn valuation.

Here are some tips to valuing your property.

Valuing A House

To get a quick idea how much your real estate is worth, have a great Home Pricing Guide which can give you a price estaminet on your Australian real estate.

For a more detailed assessment of you house, here are a two alternative to getting price estimate:

  • Ask three local real estate agents to give you a valuation of the house. They will usually do this free of charge. However, keep in mind they will likely give you the best possible price in order to get your business.

    Use the average of the three to get a good idea of what your house is worth.

  • If you need something more formal, you can pay for a certified valuer. They will visit the house, assets the local market and give you sworn valuation of your house.
Property Settlement In Divorce

Motor vehicles

To find out how much your car, boat, or motorbike is worth then Redbook is a great starting point. Just like you house, if a value cannot be agreed upon, you can hire a certified valuer to give you a sworn valuation of your vehicle.

Bank Accounts, Superannuation & Shares

Print out a balance sheet from your bank, shares account and superannuation fund with an up to date account with how much you have of each.


You already may know the value of your business and can easily come to an agreement. However, if you are not sure you can do your assessment of your business. You can find a guide to valuing your business here. If you and your partner can’t make an agreement, you can get a sworn valuation from an expert licensed to value businesses.

Miscellaneous Items

For furniture, white goods, tools, trailers, and other miscellaneous items, you can get an idea of their worth by looking at local advertisements. If you choose to do this online make sure you choose an Australian advertising website. Like all other items, you can always get a licensed valuer to make a sworn valuation on items that you and your partner can’t agree on.

Once you have valued everything, you can add it all up to find out how much your property is worth.

How Much Will I Get Or Have To Pay?

A common myth is the property will be divided 50/50 between you and your ex-partner. This is not always the case.

There is no set formula used to divide your property.

The Court will look at the particular circumstances of each case and determine the property settlement after all the evidence is heard. The Judicial Officer presiding over your case will then decide what is just and equitable based on the facts surrounding your case.

There are set principles set out in the Family Law Act 1975 that the court considers when deciding property disputes. These principles are the same whether you ending a de facto relationship or a marriage and are based on:

  • Working out your debts and assets and what they are worth.
  • You and your former partner’s contributions to the relationship such as salary earnings.
  • Any indirect financial contributions made by either spouse such as inheritances or gifts.
  • Any non-financial contributions made by either spouse.
  • Future requirements needed for either spouse or children of the relationship.

The Court will look at these facts and make an Order they consider appropriate for your case.

When the Court makes the Property Settlement Order, it is usually framed in terms of a percentage of the total Matrimonial Asset Pool that each partner will receive.

This could be in the form of 50%/50%, or it could be 60%/40%. In the case of 60%/40%, if the property pool was valued at $500,000 then one partner would get $300,000 (60%) and the other would get $200,000 (40%) of the value of the property.

You can find a more detailed example below.

How To Formalise A Property Agreement

It is not compulsory to have a formal agreement about property however, it is recommended that you do so. Here are the two main ways you can formalise a property settlement.


Consent Order

Obtaining a Consider Order from the Family Court can help you in dealing with organisations such as banks, and can help restrict either party from making claims against the other in the future.

Always make sure you get legal advice about your particular situation before you sign any final agreement.

Binding Financial Agreements

A binding financial agreement (commonly known as a prenuptial agreement) is an agreement between you and your partner that specifies how your assets, liabilities, and finances will be divided if your relationship breaks down.

The agreement is commonly made before or during a marriage or de facto relationship, however, it can be made after the breakdown of a relationship.

Always get legal advice before entering into a Binding Financial Agreement.

Property Settlement Time Limits

Wondering how much time you have to do your property settlement? Separation can be an emotional time for both parties and division of assets can be the last thing on your mind. However, there are set times in which you must make an application to the Court for a property settlement.

Months If You Were Married

Applications for property settlement must be made within 12 months of your divorce becoming final. This is when the Court issues a Certificate of Divorce, usually 1 month and a day after the divorce hearing.

Months If You Were In A De Facto Relationship

Any application for property settlement must be made within 24 month of the breakdown of your relationship.

It is recommended that you sort out your property adjustment arrangements as soon as possible. Asset values can change over time, and valuations are best done close to when the parties separate.

If the time limit has expired, you may be able to apply to the Court for “leave to proceed” notwithstanding the expiration of the time limits. If this is granted then the time frame you have to settle your property adjustment will be extended. This will only be granted in limited circumstances.

Talk to your lawyer for further details before proceeding.

Property Settlement Example

A John and Mary have recently divorced and after valuing all of their assets and liabilities they have a net property pool of $1,000,000.

This is made up of the following assets, financial resources and liabilities

  • Family home worth $800,000 with a remaining joint mortgage of $400,000. The net is $400,000.
  • An investment property worth $538,000 with a remaining join mortgage of $200,000. The net is $338,000.
  • A 2015 Mazda CX-9 Grand Touring valued at $60,000
  • A 2014 Hyundai i30 Elite valued at $30,000
  • House & Contents Of The Family Home $10,000
  • John’s superannuation $150,000
  • Mary’s Superannuation $12,000

The Court has decided to divide the property with 60% in Mary’s favor and 40% to John.

Property Settlement Lawyer


What will go to the wife ‘Mary’?

Mary would receive $600,000 of the property pool. It has been decided that this will be made up of

  • The family home worth $800,000 with the $400,000 mortgage being refinanced into her sole name. This makes up $400,000 of what she is receiving.
  • The house and contents of the family home of $10,000.
  • The Mazda CX-9 worth $60,000.
  • Her superannuation of $12,000.

The net total of all these assets comes to $482,000. To make up the balance to total $600,000 Mary will need to receive $118,000 from John in either Cash or Superannuation or a combination of both to make up the difference.

This could be done in a number of ways.

  1. Receive a cash payment from John of $118,000 that is obtained from a loan he takes out.
  2. Receive a Superannuation Split into Mary’s Superannuation account from Johns. John transfers $118,000 from his Superannuation account. This would make Mary’s Superannuation now $130,000 and Johns Superannuation $32,000.
  3. John can do a combination of both. In this case he choses to take out a loan make a cash payment of $38,000 and send a Superannuation Split into Mary’s Superannuation account of $80,000 from his Superannuation account. Mary’s Superannuation would then be $50,000 and Johns Superannuation would be $70,000.

What Will The Husband ‘John’ Receive?

John will receive 40% of the property pool, which is valued at $400,000. In this case, it will be made up of:

  • The investment property worth $538,000 with a mortgage of $200,000 being refinanced into Johns name leaving $338,000 as the net value.
  • The Hyundai i30 valued at $30,000.

The remaining $32,000 that John will receive can be balanced a number of ways such as:

  1. John can keep his superannuation of $150,000 and get a loan to give a cash adjustment payment to Mary of $118,000.
  2. Keeping $32,000 of his Superannuation and splitting $118,000 into Mary’s superannuation account.
  3. Keeping $70,000 in his Superannuation account and splitting $80,000 into Mary’s superannuation account and getting a loan of make an additional cash adjustment of $38,000.