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Busting the Top 5 Property Settlement Myths

Most people know someone who has been affected by a family breakup. It is usually a very stressful and emotional time where people are anxious about the separation, the property settlement and the emotional wellbeing and care arrangements for children.

Unfortunately, there is a great deal of misinformation in the community about property settlement. Generally, someone knows someone who has been through in this situation and we tend to take what we hear at face value, often perpetuating these myths.

The truth is, that every family law situation is different and it is important that people get the right advice and are able to make informed decisions about their family and their own future before entering into any agreements.

We’ve taken the time to identify the top 5 property settle myths and have set the record straight.

MYTH 1: The property is always shared 50/50 between partners

Your partner is automatically entitled to half of everything you own right? Wrong!

This is usually the most common myth in family law. There is no rule or presumption that parties have to divide their assets equally when they separate. Property settlement is based on all of the information provided and the discretion of the Court in deciding the matter.

Many factors are taken into consideration to determine the outcome, these include:

  • The length of the relationship;
  • The financial contributions of each person;
  • The non-financial contributions of each person; and
  • The current and future needs of each person.

It is true, though, that the longer the relationship, the more likely the Courts will view the contributions and future needs of the parties as being equal. However, the reality is that an exact 50/50 split is very rare.

MYTH 2: What you owned prior to the relationship will remain yours post-separation

People quite often assume that what was theirs prior to the relationship is theirs to keep after separation. Unfortunately, it’s not that simple.
The factors which must be taken into account when the Family Law Courts consider how property is to be divided is set out in the Family Law Act. This means every asset including inheritances and gifts are pooled in the marriage asset pool and valuation for ascertaining the way property is divided.

The Family Law Courts may give greater weight to the individual contributions of one party in a very short relationship which may result in that party being awarded an asset that they brought into the relationship.

MYTH 3: The wife always gets preferential treatment

Often people believe that the wife (in a heterosexual relationship) gets more favourably treated by the courts. The reality is that the law is gender neutral. So if the exact same circumstances existed in two different cases but with the genders reversed, the outcome should be the same.

As mentioned, contributions in a long marriage will quite often be assessed by the court as equal. Once the court has assessed contributions, it then must consider what are commonly known as “the future needs factors”. The factors include:

  • which party has the care of the children;
  • the income and earning capacities of both parties;
  • and the effect of the duration of the marriage on both parties’ earning capacities.

In a ‘long’ marriage where the parties have built up their assets together and the wife has been the homemaker and primary caregiver to the children, it may be the case that the court will award an adjustment in her favour because of her future needs.

Again, it is most definitely not a starting point, nor a guaranteed outcome.

MYTH 4: You need to be divorced before you can divide your property

There is no provision in the law that requires a divorce to be finalised before a financial settlement can be negotiated.

You are only entitled to a divorce after 12 months of separation, however, you can start negotiating property settlements immediately after separation.

Once a certificate of divorce has been issued, a limitation period of 12 months commences within which either party must apply for a property settlement or spousal maintenance. Therefore it is a good idea to start thinking about your property settlement prior to, or simultaneously with, your application for divorce.

MYTH 5: Assets held by companies or trusts does not form part of the asset pool

Many people think it is possible, or even easy, for one partner to “hide” assets by registering them in the name of a company or trust. This is not the case. If one spouse in a marriage has the control of or an interest in a company or trust then assets held by that company or trust may be considered a part of the asset pool. This is not always so easy to prove and requires consideration of trust and company documents.


No two family law cases are the same and urban myths don’t usually apply. The Courts will always take into account the individual circumstances of each case before making any decisions.

If you know someone who may need assistance or advice on how to proceed please get in touch with our family law experts.

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