Property Settlement & Financial Agreements

The Four-Step Process for Property Settlement

The first step requires the court to identify the pool of assets, liabilities, and financial resources available for division. This includes the family home, investment properties, superannuation, shares, bank accounts, motor vehicles, businesses, and any other assets of value. Liabilities such as mortgages, personal loans, credit card debts, and tax debts are also identified and deducted from the gross asset pool. The second step assesses the contributions made by each party during the relationship. Financial contributions include wages, bonuses, inheritances received during the relationship, and gifts from family. Non-financial contributions include improvements to property, such as renovations or landscaping. Contributions to the welfare of the family include homemaking, parenting, and emotional support. The court does not assign a monetary value to homemaking contributions but recognises them as equally important to financial contributions. The third step considers the future needs of each party, including who will care for children, each party's age and health, their income-earning capacity, and whether they have responsibility for a new partner or children from another relationship. The fourth step ensures the overall result is just and equitable.

How Superannuation Is Treated in Property Settlements

Superannuation is treated as property under the Family Law Act 1975 and can be divided between parties as part of a property settlement. Unlike other assets, superannuation cannot simply be withdrawn and paid to the other party — it must be split through a superannuation splitting order or agreement. The court can order that a specified percentage or dollar amount of one party's superannuation interest be transferred to the other party's superannuation fund. For Queensland couples, this applies to all superannuation interests, including Australian superannuation funds, self-managed superannuation funds (SMSFs), and certain foreign superannuation schemes. The value of superannuation is typically calculated at the date of the hearing or agreement, not at the date of separation. It is important to obtain a current valuation of all superannuation interests and to understand the tax implications of any proposed splitting. A superannuation splitting agreement can be incorporated into consent orders or a binding financial agreement, providing a streamlined mechanism for dividing retirement savings without requiring court involvement.

Binding Financial Agreements and Consent Orders

Binding Financial Agreements (BFAs) and consent orders are two mechanisms for formalising a property settlement without going to court. Consent orders are orders made by the Federal Circuit and Family Court of Australia that reflect an agreement reached by both parties. They are filed with the court and, once sealed, have the same force and effect as orders made after a contested hearing. Consent orders are particularly useful because they can deal with property, superannuation, and spousal maintenance in a single document. Binding Financial Agreements, on the other hand, are private contracts that do not require court approval. They can be made before, during, or after a marriage or de facto relationship and can cover property division, spousal maintenance, and other financial matters. For a BFA to be binding, both parties must receive independent legal advice from a qualified Australian legal practitioner about the effect of the agreement, and the agreement must be signed and witnessed. BFAs are commonly known as prenuptial agreements (pre-nups), but they can also be entered into after marriage to suit changing circumstances.

Property Settlement & Financial Agreements FAQs (Queensland Law)