For many separating couples, the property pool consists primarily of the family home, savings, superannuation and personal liabilities.

For business owners and families with more complex financial structures, the position can be very different.

A property settlement may involve private companies, family trusts, business interests, investment entities, shareholder or director loans, retained earnings and assets held across several structures.

The fact that an asset is held by a company or trust rather than personally does not necessarily mean it can simply be disregarded. Equally, not every asset owned by a company or trust automatically becomes property available for division between the parties.

Understanding the ownership, control, value and financial significance of these structures is therefore an important part of resolving a complex property settlement.

How does the Court approach a property settlement?

The property settlement framework was clarified by amendments to the Family Law Act 1975 that commenced on 10 June 2025.

Broadly, the Court identifies the parties' property and liabilities, considers their contributions, considers their current and future circumstances, and determines whether the proposed alteration of property interests is just and equitable.

Where companies, businesses or trusts are involved, simply identifying the property and financial resources of the parties can require considerable investigation.

What happens to a business in a family law property settlement?

A business interest can be highly significant to a property settlement.

Depending on how the business is structured, a party may hold:

• shares in a company;
• an interest in a partnership;
• units in a unit trust;
• interests or powers associated with a discretionary trust;
• business assets as a sole trader; or
• interests through several interconnected entities.

The first step is usually to understand what the party actually owns or controls and how the business structure operates.

The business may then need to be valued.

Importantly, the value of a business is not necessarily the amount shown for its assets in the accounts. Its value may also reflect matters such as profitability, maintainable earnings, goodwill, liabilities and the commercial circumstances of the business.

How are companies dealt with?

A company is a separate legal entity, so assets owned by a company are not automatically the personal assets of its shareholders.

However, a person's shares in the company may themselves have substantial value.

The financial relationship between the person and the company may also need to be examined. Relevant issues can include:

Shareholdings · Director and shareholder loans · Dividends · Retained profits · Related-party transactions · Company liabilities · Business assets

The Family Law Act gives the Court broad powers in property proceedings and, subject to statutory safeguards, can also permit certain orders affecting third parties, including orders relating to the transfer of company shares.

The precise treatment of a company will depend on the particular structure and circumstances.

What about family trusts?

Trusts can require even closer examination.

It is not enough simply to say that an asset is “owned by the family trust”.

The legal and practical operation of the trust may need to be considered, including:

• who is the trustee;
• who appoints or can remove the trustee;
• who are the beneficiaries;
• who makes decisions about distributions;
• the terms of the trust deed;
• how the trust has historically operated; and
• the extent of a party's control over the trust and its assets.

Depending on those circumstances, an interest associated with a trust may be relevant as property or as a financial resource, among other possibilities.

The outcome is highly fact-specific, which is why the trust deed and the way the trust actually operates can be important.

“It's in the trust, so it isn't part of the property settlement” — is that correct?

Not necessarily.

This is one of the misconceptions that can arise in complex property matters.

Putting assets into a company or trust does not, by itself, determine how those interests will be treated in family law.

Conversely, the existence of a family connection to a trust does not mean that every trust asset automatically belongs to the parties.

The Court considers the actual legal and financial circumstances. That can include the nature of a party's interest, their degree of control and the practical operation of the structure.

This is an area where obtaining advice about the particular entity structure is especially important.

Why does control matter?

Legal ownership tells only part of the story in some structures.

For example, a person may not personally hold title to the assets of a discretionary trust but may occupy positions that give them significant influence over how the trust operates.

The Court's own case-management material recognises that family-law property cases may involve family trusts, companies or partnerships that are owned or in the effective control of a party and require expert valuation or investigation.

The particular rights and powers created by the relevant documents must therefore be examined rather than assuming control merely from a person's relationship to an entity.

What financial documents may need to be disclosed?

Complex structures usually make financial disclosure particularly important.

The Court states that full and frank disclosure extends to a party's total direct and indirect financial circumstances, including interests and financial resources held through corporations, trusts, companies and other structures.

Depending on the matter, relevant documents may include company financial statements, tax returns, BAS records, trust deeds and amendments, trust financial statements, distribution records, share registers, loan accounts, bank statements and business sale or acquisition documents.

Documents concerning certain transfers or disposals of property can also be relevant.

What are director and shareholder loan accounts?

Loan accounts are frequently encountered in privately owned businesses.

For example, money may have been advanced:

• by a director to a company;
• by a company to a director or shareholder;
• between related companies;
• between a trust and a beneficiary; or
• between family members and associated entities.

These balances should not simply be ignored.

It may be necessary to establish whether a genuine liability or receivable exists, whether it is recoverable and how it should be treated when determining the financial position.

The treatment of inter-entity and party loans can be significant in complex cases; recent Federal Circuit and Family Court judgments illustrate disputes involving company and trust valuations, inter-company loans, party/entity loan balances and associated tax liabilities.

How is a business valued?

Sometimes the parties can agree on the value of a business. In more complex matters, an independent expert valuation may be required.

A valuation may involve examining matters such as historical financial performance, maintainable earnings, business assets and liabilities, goodwill, industry conditions and other factors relevant to the particular business.

The appropriate valuation methodology will depend upon the business.

The Court's procedures specifically contemplate expert investigation and valuation where companies, trusts or other entities are involved and their values are contested.

Is the money in a company bank account simply divided between the parties?

Usually the analysis is not that simple.

A company's cash belongs to the company. It may be required for working capital, taxation, employee entitlements, creditors or other business obligations.

At the same time, the company's financial position may affect the value of a party's shares or other interests.

Care needs to be taken to avoid double counting. For example, an amount reflected in the value of a business should not necessarily also be treated separately as another asset available for division.

This is one reason expert accounting evidence can become important in higher-value matters.

What about tax consequences?

Tax can materially affect the practical outcome of a proposed settlement.

A transfer or restructuring involving a business, company, trust or investment may have taxation implications that differ considerably from simply transferring cash.

Potential taxation consequences should therefore be identified before settlement terms are finalised.

Family lawyers will often work with the client's accountant or specialist tax adviser where necessary. Legal advice about a family law settlement should not be treated as a substitute for specialist taxation advice.

Can assets be transferred before or after separation?

Transactions involving assets or business interests around the time of separation may require careful examination.

The disclosure requirements specifically extend to certain disposals of property by sale, transfer, assignment or gift made in the year immediately before separation or since final separation where they may affect, defeat or deplete a claim.

A transaction is not necessarily improper simply because it occurred near separation. Businesses continue to operate and legitimate transactions continue to occur.

The purpose, value and circumstances of a transaction may nevertheless be relevant.

Why can complex property matters require other professionals?

A family lawyer does not necessarily work alone in a complex property settlement.

Depending on the circumstances, the matter may involve:

Accountants · Forensic accountants · Business valuers · Property valuers · Tax advisers · Financial advisers

The lawyer's role includes identifying the legal issues, determining what disclosure is required and coordinating the evidence needed to understand the property pool and negotiate or litigate the matter.

The advantage of understanding both family law and business structures

Where a property settlement involves businesses, companies and trusts, understanding the commercial structure behind the assets can be just as important as understanding the family law framework.

Questions about ownership, company structures, trust deeds, shareholder arrangements, loan accounts and business valuations can materially affect the outcome.

At KMB Legal, our work across Family Law and Commercial & Business Law gives us a commercial perspective when assisting clients with property settlements involving business interests and more complex financial structures.

Getting advice early

Complex structures can take time to investigate.

Obtaining advice early can help identify the documents required, determine whether specialist valuation or accounting evidence may be necessary, and reduce the risk of negotiating a settlement before the financial position is properly understood.