4 Step Process to Calculate the Value of Your Property Settlement


Separating and divorcing couples have numerous issues to contend with beyond the emotional upheaval of an uncoupling.  Sound legal advice from settlement solicitors is a solid step towards securing a fair property settlement as part of the divorce proceedings.

Property settlements are discretionary, based on such factors as the contributions made by each party and making adjustments based on the future needs of the parties, earning potential, primary care giving role, etc.  The courts, therefore, don’t rely on the simplistic formula of a 50/50 split when making a determination on a fair property settlement, instead, due consideration is given to a range of factors as a means of making these settlements equitable, as opposed to equal.  

The courts, therefore, determine property settlements on the basis of relevant factors by using a four-step process to inform the calculations.  These factors include:

  1. Identifying and assigning value to the assets, liabilities, and financial resources of the couple;
  2. An assessment of the couple’s financial (investments, property, businesses and superannuation) and non-financial contributions (this may include a spouse’s homemaker role, as applicable);
  3. The Family Law Act (75[2]) dictates that the ‘future needs factor’ be considered.  The courts may take into account the health and ages of the parties, if either has the care of a child/children of the marriage, and the physical and mental capacity of the parties in terms of future employment and earning potential, when undertaking a review of the ‘future needs factor’.  The court may award an additional loading of the matrimonial property to the party determined to have the lower earning capacity, or the party with primary care of the children;
  4. Giving full consideration to the effect the first 3 factors have had / will have on the individuals of the dissolving union to promote a just and equitable property settlement for both parties.

A divorce can have a long-term financial impact on separating couples.  To ensure that the courts have sufficient details and information of the parties’ current and future financial position, it’s important to consult with an attorney for property settlement. These settlement solicitors can give legal advice and ensure that income disparities and household contributions are brought to the attention of the courts for consideration as it may not be possible to re-visit these financial factors once the divorce has been finalised.