Property Settlement: The Myth of the 50-50 Split

The Myth of the 50-50 Split – What to Expect in a Property Settlement

Going through a separation can be a stressful and overwhelming experience and it may feel daunting to work out how you and your former partner will divide your property. Contrary to the myth of the ‘50-50 split’, there is no automatic entitlement to a certain percentage of property interests.

Instead, the Courts assess each case individually, implementing a 5-step process to determine an equitable division.

The 5-Step Process

There are five steps which are followed to determine a party’s entitlement to a property settlement following the breakdown of a relationship or marriage.

These steps are:

To determine whether or not it is “just and equitable” to make an adjustment to the parties’ interests in the property available for division;

To identify and value all property interests that are available for division. This includes all assets, liabilities and superannuation of each spouse, whether held solely, jointly with your spouse, jointly with any other person, or held by a legal entity you have an interest in or control over;

To consider the contributions of each party to the assets at the commencement of, during and after the relationship. These contributions include financial and non-financial (both direct and indirect) contributions made by or on each party’s behalf to the acquisition, conservation or improvement of the property, as well as contributions as homemaker or parent;

To consider the future needs of each party including factors such as whether either party has the care of a child of the relationship, the age and health of each of you, income earning capacity, disparity in income and instances of family and/or domestic violence;

To consider whether, in all the circumstances of the case, if the proposed order is “just and equitable”.

Important Time Limits

There are important time limits that apply for when you may bring a property settlement application. These are summarised in the table below:

Nature of the Relationship

Time Limit

You and your ex-partner are separated but still married

No time limit

You and your ex-partner were married but are now divorced

12 months from the date the divorce takes effect

You and your ex-partner were in a de facto relationship

2 years from the date of separation

Exceptions to the time limits may apply, and an application can be brought for leave to proceed outside of these times, for example, where one party may be disadvantaged by leave not being granted for them to bring an application out of time.