When a marriage or de facto relationship ends, separating finances can be one of the most important—and sometimes most complicated—parts of the process.

A family law property settlement can deal with much more than the family home. Depending on the circumstances, it may involve savings, investments, superannuation, businesses, companies, trusts, vehicles, debts and other financial interests.

There is also no automatic rule that property is divided 50/50.

Australian family law requires consideration of the particular financial circumstances of the parties before determining whether property interests should be altered and, if so, what outcome is just and equitable.

What is a property settlement?

A property settlement is the process of resolving the financial relationship between parties following the breakdown of a marriage or de facto relationship.

It can involve determining what happens to property, liabilities and other financial interests.

Many separating couples reach an agreement without asking the Court to decide their property settlement. Where agreement cannot be reached, the Federal Circuit and Family Court of Australia has broad powers to make property orders.

Importantly, simply separating does not automatically change legal ownership of assets or finalise financial claims between former partners.

What property is considered?

The first stage involves identifying the parties' property and liabilities.

Depending on the circumstances, this may include:

• the family home and other real estate;
• bank accounts and savings;
• shares and investments;
• motor vehicles;
• superannuation;
• businesses and company interests;
• interests involving trusts;
• valuable personal property;
• mortgages;
• personal loans;
• credit cards; and
• other debts and financial interests.

Property may be relevant even if it is held in only one person's name.

Similarly, an asset is not necessarily excluded simply because one person acquired it before the relationship or after separation. The timing and circumstances of acquisition may instead be relevant when considering the parties' contributions and the overall outcome.

Is everything divided 50/50?

No.

There is no automatic 50/50 rule for family law property settlements.

The Court must consider the individual circumstances of the relationship and can only make an order altering property interests if it is satisfied that doing so is just and equitable.

Two couples with property pools of the same value may therefore have different outcomes because their contributions, responsibilities and future circumstances are different.

How does the Court determine a property settlement?

Following reforms that commenced on 10 June 2025, the Family Law Act 1975 expressly sets out the framework for determining property settlements.

Broadly, the process involves:

1. identifying the parties' property and liabilities;
2. considering the contributions made by each party;
3. considering each party's current and future circumstances; and
4. determining whether the proposed outcome is just and equitable.

These principles are also relevant when parties negotiate a property settlement outside Court.

What contributions are considered?

Property settlements are not determined solely by asking who earned the most money.

The Court can consider different forms of contribution made during the relationship.

These may include financial contributions such as income, savings or property brought into the relationship, as well as contributions to acquiring, conserving or improving property.

The law also recognises contributions to the welfare of the family, including contributions as a homemaker and parent.

The significance of particular contributions depends upon the circumstances of the relationship as a whole.

What about property owned before the relationship?

Property owned before a marriage or de facto relationship can be relevant.

However, it is not necessarily quarantined from consideration simply because one person owned it first.

Its significance may depend upon factors such as:

• its value when the relationship commenced;
• the length of the relationship;
• what happened to the property during the relationship;
• contributions made by each party;
• whether it was sold or combined with other assets; and
• the parties' overall financial circumstances.

The treatment of substantial initial contributions can therefore be more nuanced than simply removing their original value from the property pool.

What happens to superannuation?

Superannuation can be dealt with as part of a family law property settlement.

The Family Law Act permits superannuation interests to be the subject of splitting orders in accordance with the statutory superannuation regime.

A superannuation split does not generally mean the recipient receives cash immediately. The split usually creates or transfers a superannuation entitlement that remains subject to superannuation rules.

Superannuation can be particularly important where there is a significant difference between the parties' retirement savings.

What happens if one party owns a business?

Business interests can make a property settlement considerably more complex.

It may be necessary to identify the relevant company, trust, partnership or other structure and determine the nature and value of the party's interest.

A business may also require independent valuation.

Company accounts, tax records, trust documents, shareholder and director loan accounts and other financial information may need to be considered.

Related article: Complex Property Settlements: Businesses, Companies and Trusts in Family Law

Do both parties have to disclose their finances?

Yes.

Financial disclosure is fundamental to resolving a property settlement.

The duty requires parties to provide relevant financial information and documents and is ongoing while the property dispute is being resolved. From 10 June 2025, the financial disclosure duty was expressly incorporated into the Family Law Act.

This can be especially important where one party has greater knowledge or control of the family's finances or business structures.

Related article: Duty of Disclosure in Family Law Property Settlements: What You Need to Know

Does family violence affect a property settlement?

It can.

Since 10 June 2025, the Family Law Act expressly requires the economic effect of family violence to be considered where relevant when determining a property settlement.

For example, family violence may have affected a person's ability to make contributions or may continue to affect their financial circumstances after separation.

The reforms also make clear that economic or financial abuse can constitute family violence.

This does not mean that every allegation of family violence automatically produces a particular percentage adjustment. Its relevance depends upon the circumstances and economic effect in the particular case.

What about debts?

Liabilities also need to be identified.

These can include mortgages, credit cards, personal loans, tax debts and business-related liabilities.

The existence of a debt does not necessarily determine how it will ultimately be treated. Its purpose, when it was incurred and the surrounding circumstances may be relevant.

Complex property settlements may also involve director loans, shareholder loans or liabilities between related entities.

Can we agree on our own property settlement?

Yes.

Many couples resolve their property matters through negotiation or dispute resolution rather than having a judge determine the outcome.

However, reaching an informal agreement and legally finalising the financial relationship are different things.

Depending on the circumstances, an agreed settlement may be formalised through consent orders or a binding financial agreement.

The appropriate option depends upon the circumstances, and legal advice should be obtained before finalising the arrangement.

Do I need to wait until I am divorced?

No.

For married couples, a property settlement can be dealt with before a divorce is finalised. Divorce and property settlement are separate legal processes.

However, divorce can affect the time available to commence property proceedings, so it is important not to overlook the applicable limitation period.

Are there time limits?

Yes.

For married couples, an application for property orders generally needs to be commenced within 12 months after the divorce order takes effect.

For de facto relationships, the general time limit is two years after the relationship breaks down.

Applications can sometimes proceed outside those periods, but additional legal requirements apply and permission should not be assumed.

Obtaining advice well before a limitation period expires is therefore important.

Should property be divided immediately after separation?

There is no single answer that applies to every couple.

Some matters can be resolved relatively quickly. Others require disclosure, property valuations, business valuations or investigation of more complicated financial structures before sensible negotiations can occur.

What is important is understanding the financial position before agreeing to a final settlement.

Once a settlement is legally finalised, changing it later can be difficult.

Getting advice early

Early legal advice does not necessarily mean commencing Court proceedings.

It can help you understand:

• what property and liabilities need to be identified;
• what financial disclosure should be obtained;
• how different contributions may be relevant;
• whether valuations are required;
• the implications of businesses or trusts;
• your options for negotiating a settlement; and
• how an agreement can ultimately be formalised.

Understanding these issues before making significant financial decisions can help avoid problems later.