Family law
Property and financial settlements
Dividing assets, debts and superannuation after a separation. The law on how this is done changed substantially in June 2025, and the changes apply to matters that have not yet been finalised, including separations from years ago.
Alicia Catron 0407 171 626 or Michelle Simmons 0407 534 594. Bella Vista, appearing in the Federal Circuit and Family Court at Parramatta.
There is a time limit, and most people do not know it
If you are divorced, you have twelve months from the date the divorce order took effect to apply to the court for a property settlement or spousal maintenance.
If you were in a de facto relationship, you have two years from the date the relationship ended.
After that, you need the court’s permission to bring an application at all, and it is not granted as a matter of course. The most common way people lose their entitlement is not a fight. It is simply leaving the house in joint names because nobody was arguing about it, and letting the period run.
You do not have to be divorced to sort out the property, and you do not have to wait for anything. A settlement can be reached and formalised at any point after separation. If you are approaching either limit, or have passed it, call us rather than assuming the position is hopeless.
What forms part of the pool
Everything either of you owns, whether held individually, jointly or with someone else, and whenever it was acquired. Assets brought into the relationship and inheritances received during it are still in the pool. What varies is how they are treated, not whether they count.
- The family home, investment properties and vacant land
- Bank accounts, shares, managed funds and cryptocurrency
- Superannuation, including self managed funds and defined benefit interests
- Businesses, company interests and partnership interests
- Interests in family trusts, and control of them, which is often the real question
- Vehicles, boats, tools and equipment, jewellery and household contents
- Redundancy payments, compensation payouts and inheritances
- Debts. Mortgages, personal loans, credit cards, tax debts and business liabilities all come off the pool. A settlement is about the net position, not the assets alone
- Companion animals. Pets are now dealt with under their own framework, with the court able to consider who cares for the animal, any history of cruelty and any family violence involving the animal
June 2025
What changed, and why it may matter to you
The framework for dividing property was rewritten. It applies to new matters and to existing ones that had not reached a final hearing, and to settlements negotiated privately, not only to court cases.
Family violence now affects the division
The court must consider the economic effect of family violence at two points: when assessing what each person contributed, because violence affects what someone was able to contribute financially and at home; and when assessing current and future circumstances, because the effects persist through damaged credit, interrupted careers and debt taken on under pressure.
Financial abuse is named
Economic and financial abuse is expressly identified as family violence, including controlling access to money, withholding financial support, coercing someone into debt, dowry abuse and unreasonably denying financial autonomy. More on family violence.
The steps are now in the legislation
What was previously drawn from decided cases is now set out in the Act itself, along with a changed set of provisions. This matters practically: older advice, and older website content, is framed against a structure that no longer exists.
Wastage is dealt with directly
Where one party has wasted assets, through gambling, reckless spending or deliberately dissipating funds, that is addressed as part of the assessment rather than by notionally adding the money back into the pool.
Housing needs are expressly considered
The housing needs of any children of the relationship are a stated consideration, which matters where the argument is about whether the home is sold or retained.
Disclosure is now a duty under the Act
The obligation to disclose your financial position fully and on an ongoing basis has been elevated from the court rules into the legislation. It applies whether or not proceedings have been started.
How a settlement is worked out
There is no fixed formula and no starting point of half each. The court works through a sequence, and so do we when advising you on what a fair outcome looks like.
Identify and value everything
All assets, liabilities, superannuation and financial resources of both parties, valued as at the time of the settlement rather than at separation. Where values are disputed, a single expert valuer is usually appointed jointly.
Assess contributions
Financial contributions, including what each of you brought in, earned and received by gift or inheritance. Non-financial contributions such as renovations, running the business or managing investments. And contributions to the welfare of the family, meaning caring for the children and running the household, which carry the same weight as earning.
Assess current and future circumstances
Age and health, income and earning capacity, who the children live with, commitments to support others, the standard of living, the economic effect of any family violence, and the housing needs of the children. This is where a division moves away from the contributions figure.
Ask whether the result is just and equitable
The court stands back and considers whether the proposed division is fair in all the circumstances. A settlement that cannot pass this test will not be approved, even if both of you agree to it.
Then comes the practical question, which is how a percentage is actually delivered. If one of you keeps the house, the figures are balanced using superannuation, other assets or a cash payment, and whether that is affordable often shapes the settlement more than the percentage does.
Superannuation
Superannuation is treated as property and can be split between you, though it does not become cash. A split moves an interest from one person’s fund into the other’s, where it stays subject to preservation rules until they are old enough to access it.
- Both parties’ superannuation is disclosed and valued, and information can be obtained directly from the fund
- Defined benefit and self managed funds need particular care, and often a specialist valuation
- The fund must be given notice of any proposed order and the opportunity to object
- A split is not always the answer. Sometimes it is better for one party to keep more superannuation and less of the cash assets, or the reverse, depending on age and immediate needs
The family home
Usually the largest asset, and usually the thing people most want answered first.
- Who stays. Neither party has an automatic right to remain or to require the other to leave. Where it is not safe or workable to stay under one roof, a court can make orders about occupation.
- The mortgage. Both borrowers remain liable to the lender regardless of any agreement between you. Missed repayments affect both credit files. This needs to be managed from the start of the separation, not at the end.
- Refinancing. If one of you is keeping the house, that party generally has to refinance in their sole name. Whether they can borrow enough is often the pivotal fact in the whole settlement, so it is worth checking with a broker early rather than negotiating around an assumption.
- Joint tenancy. While the property is held as joint tenants, it passes automatically to the survivor on death, whatever any will says. This should be addressed as part of the separation. More on wills.
- Duty and tax. Transfers between parties made under court orders or a binding financial agreement can attract concessional treatment for transfer duty, and a capital gains tax rollover may be available. Informal transfers generally do not get either, which is one of the strongest reasons to formalise.
- We do the conveyancing too. Where the home is being sold or transferred, that work is handled in the same office, so the orders and the transfer are consistent with each other.
Three ways to formalise it
An agreement that is not documented properly is not worth much. It does not bind either of you, it does not stop a claim later, and it does not attract the duty and tax concessions.
| Informal agreement | Consent orders | Binding financial agreement | |
|---|---|---|---|
| What it is | A private understanding, perhaps in writing | Your agreed terms approved and made as orders by the court | A contract complying with strict statutory requirements |
| Court involvement | None | Filed and considered by a registrar. Neither of you attends | None |
| Legal advice | Not required | Strongly advisable | Each party must have independent legal advice, or it is not binding |
| Enforceable | No | Yes | Yes, though it can be set aside on certain grounds |
| Stops a later claim | No | Yes | Yes |
| Duty and CGT concessions | Generally not available | Available | Available |
| Typical use | Not recommended for anything of value | The usual choice where you agree | Where orders do not fit, or an agreement is made before or during the relationship |
Consent orders are the usual answer. They are considerably cheaper than litigation, do not require either of you to attend court, and give you a final, enforceable outcome. Where you broadly agree, this can often be done in weeks.
When you cannot agree
Negotiation and mediation
Most matters resolve without a hearing. Mediation, whether privately arranged or through a service, is considerably cheaper than litigation and gives you control over the outcome instead of handing it to a judge.
They will not disclose
Disclosure is a legal duty, not a courtesy. Where it is not complied with, documents can be compelled, subpoenas issued to banks, employers and accountants, and adverse inferences drawn about what is being hidden. Costs consequences follow too.
Assets are being moved
Where property is being sold, transferred or dissipated, the court can restrain it urgently. A caveat can protect an interest in real property in the meantime. This is one of the few genuinely urgent situations in a property matter.
Trusts and companies
Assets held in a structure are not automatically excluded. What matters is control, and who really benefits. These matters need proper forensic work rather than an assumption either way.
Spousal maintenance
Separate from the property division. Where one party cannot adequately support themselves and the other can afford to help, maintenance can be ordered, including urgently while the matter is resolved.
Proceedings
If it has to be litigated, we run it. Most cases settle at some point along the way, and preparing properly from the outset is what produces a sensible settlement rather than a drawn-out one.
Common questions
Is everything split fifty fifty?
No, and there is no presumption to that effect. Fifty fifty is a common outcome in long relationships where contributions were broadly comparable and needs are similar, which is why people assume it is the rule. Shorter relationships, significant assets brought in by one party, or a large disparity in earning capacity or care of the children all move the figure.
Do I have to be divorced first?
No. Property can be settled at any time after separation, and often should be settled before you divorce, because the divorce order starts a twelve month clock on your right to apply. More on divorce.
We were never married. Do I have any rights?
Yes, if you were in a de facto relationship. That generally requires two years together, or a child of the relationship, or substantial contributions such that it would be unjust not to make an order, or a registered relationship. The same law applies to the division, but the time limit is two years from separation rather than twelve months from divorce.
Does it matter who caused the separation?
Not in itself. An affair, or who decided to leave, does not affect the division. What can matter is conduct with a financial dimension: wasting assets, hiding them, or family violence with an economic effect. That last one is a recent and significant change.
I inherited money during the relationship. Is it protected?
It is in the pool, but it is treated as your contribution. How much weight it carries depends on when it was received, what happened to it and how long the relationship continued afterwards. An inheritance received recently and kept separate is treated very differently from one spent on the family home fifteen years ago.
What if they have already spent a lot of it?
Where one party has wasted assets, that is taken into account in the assessment. It has to be evidenced rather than asserted, which is why bank records and disclosure matter, and why acting promptly is better than waiting to see how much more disappears.
How long does it take, and what does it cost?
Consent orders, where you broadly agree, can be done in a matter of weeks for a modest fixed cost. Negotiated settlements typically take a few months. Litigated matters take considerably longer and cost considerably more, which is why we push hard for settlement where it is safe and sensible to do so. We will give you an estimate at the first appointment.
We separated five years ago and never sorted it out. Is it too late?
Not necessarily. The limits are about applying to the court, and the court can grant permission to apply out of time in some circumstances. If you both still agree, consent orders may also be available. Do not assume you have lost the right, and do not delay further, because both of those make it harder.
Find out what a fair settlement looks like for you
At the first appointment we will work through what is in the pool, what a realistic range of outcomes looks like, and the quickest way to get there. Most matters settle, and the ones that settle well are the ones where both people got proper advice early.
Alicia Catron 0407 171 626 or Michelle Simmons 0407 534 594. Suite 3.13, 33 Lexington Drive, Bella Vista NSW 2153. Monday to Friday 9am to 5pm, and contactable outside those hours.