Property Settlement: The Four Step Process

by Resolve Conflict on October 23, 2019

Property Settlement_ The Four Step Process- Resolve Conflict Family LawyersAs every relationship is unique so is every property settlement outcome. However, whilst there is no exact formula used to determine the precise entitlements you will be awarded, there is a four step process that your lawyer will use to advise you on the range of entitlements you will likely be eligible to, rather than an exact dollar amount.

It is the Courts main objective in determining a property settlement under the Family Law Act 1975 to “make such orders as will finally determine the financial relationship between the parties to the marriage and avoid further proceedings between them” (s 81 FLA).

The four step process used to determine property division within a property settlement is as follows:

Step 1: Determining The Net Asset Pool

The net asset pool is the total value of all assets minus the value of all liabilities.

Assets are things that you own jointly or in your own name and can include:

  • Family home
  • Investment properties
  • Motor vehicles / boats
  • Personal property (jewellery, artwork, personal belongings of value)
  • Household items (furniture, white-goods etc.)
  • Superannuation
  • Savings
  • Stocks and shares
  • Business interests


Liabilities are your debts, again either jointly or in your own name. These include:

  • Mortgage debts
  • Credit card
  • Personal loads
  • Car loans

Once all the above information is identified and valued the total asset pool can be calculated.

Total Assets – Total Liabilities = Net Asset Pool.

Related Article: Matrimonial Asset Pool: How is it valued and divided?

Step 2: Assessment Of Contributions

The second step is to assess all the financial and non-financial contributions each party made to the marriage or de facto relationship. The contributions are broken down into four specific groups:

  • Financial
  • As a parent
  • As a homemaker
  • Non-financial

All the above contributions made at the start, during the relationship and after separation will be considered.

Step 3: Future Needs And Adjustments

The third steps looks at each party’s current and future needs. Future needs can cover a whole host of factors both parties may be facing in unequal proportions. These may include but are not limited to:

  • Age
  • State of health
  • Income earning capacity
  • Other resources
  • Parental responsibilities
  • Financial circumstances of any new relationship

Step 4: Just And Equitable

The final step is to reality test the result to see if it is ‘just and equitable’. This step requires an overall assessment of Steps 1, 2 and 3, and consideration as to whether that would result in an outcome that is overly beneficial to on party, which places to other party at a disadvantage.

Final note, it is vital that you disclose all of your assets and liabilities to ensure that proceedings are fair. Hiding or not disclosing your true financial position can come with financial and legal ramifications.

Related Article: Duty of Disclosure: “Show and Tell” not “Hide and Seek”


Note: This is general information advice only and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters, please contact us on 03 9620 0088 or email


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