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Articles

Five Steps of a Property Settlement

Phoenix Blavius,

4th Oct, 2022

Understand the five steps of a property settlement, from establishing jurisdiction to assessing contributions and future needs, ensuring a just and equitable outcome.


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If you are recently separated and have turned to Google to try and get a bit of an idea of what’s involved in a property settlement, in doing so it is likely that you have stumbled upon the idea of the five steps to a property settlement. So, what are the five steps and what do they mean?

During your initial consultation your family lawyer will ask a range of questions which may on the surface seem unrelated to your family law matter. However, in gathering this information your family lawyer is using the five step framework in order to best advise you as to your likely range of entitlements in your property settlement.

Step One – Establishing jurisdiction

The first step to a property settlement is to determine whether it is just and equitable for there to even be a property settlement at all. In most cases this criteria is quickly checked off the list, but since the judgement of Stanford v Stanford [2012] HCA 52 the Court has been increasingly less willing to invoke their jurisdiction under the Family Law Act 1975 in matters where it is not so clear cut that a property settlement is necessary.

Step Two – Valuing the pool

The second step is to identify all of the property that is owned and determine the value of that property. Once you have identified the assets, liabilities, financial resources and superannuation held and the value of each, this property forms your “pool”.

Step Three – Assessing contributions

The third step is to assess the contributions made by each party to the acquisition, upkeep or improvement of the property pool. When the Court looks at contributions it looks at both financial and non-financial contributions that were made by each party initially, during the relationship and post-separation.

In assessing financial contributions, the Court will look at the income of each party together with the receipt of any inheritances, gifts or windfalls.

In assessing non-financial contributions, the Court will look at contributions such as those made as a homemaker, parent or any other significant non-financial contribution which has assisted the parties in the acquisition, upkeep or improvement of their property pool.

Once the contributions of each party have been identified, it is then necessary to determine whether an adjustment should be made due to greater contributions on behalf of either party.

Step Four – Future Needs

The fourth step is to identify any “future needs factors” which may call for an adjustment in favour of either party. In making an assessment of future needs, the Court will consider many factors including the age, health, future earning capacity and future care of any dependants either party may have.

Step Five – Justice and Equity

Once you have arrived at the fifth step, your family lawyer will advise you of your “range of entitlements”. Because judges have discretion, and each party will have a different interpretation of their contributions and future needs, a range is to account for what family lawyers might refer to as “your best day in Court” and “your worst day in Court”.

A property settlement can be formalised either in a financial agreement, a consent Order or in cases where parties cannot agree then by an Order of the Court. However, the vast majority of property settlements are finalised by way of a consent order.

In all circumstances except for a financial agreement, the Court will be required to assess each matter as a whole and whether in all of the circumstances, the final Order is just and equitable, i.e., does the property settlement each party is receiving fit within their “range of entitlements”.

If you would like to book an initial consultation to discuss your likely range of entitlements, please give us a call on (07) 3185 2167 or click here.

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