It is not a legal requirement that a division of assets go through the court system, or occur by way of a formal agreement. However, an informal agreement is not enforceable and your ex can potentially apply to the court at a later date for a greater share than you agreed. Dividing your assets using a formal agreement or court orders can also come with taxation advantages.

A financial agreement is a step up from an informal agreement and takes the form of a type of contract between you and your spouse or former spouse. Financial agreements are unique because they can also be prepared while you and your spouse are still together in order to govern how your assets may be dealt with in the event you separate.

In other parts of the world, these agreements are often referred to as pre-nuptial agreements. Still, here in Australia, we call them financial agreements or binding financial agreements.

Financial agreements have very strict requirements to be valid. If these requirements are not met, they can be set aside by the Court when they are making orders in relation to property settlement. There are several reasons a financial agreement may be set aside.

Consent orders are where the Court has approved the split of assets and liabilities proposed by the parties and made a Court order on the agreed terms. While technically still a Court order, orders made by consent are usually referred to as “consent orders”. These consent orders are legally enforceable just like any other Court order, and there are only a few, very specific circumstances in which they can be set aside.

A Court order by means other than consent is when the parties cannot agree on a fair split of the property pool and the Court makes a decision for them. Again, court orders are legally enforceable and outside of very specific circumstances, cannot be set aside.

Superannuation is considered property and forms part of the property pool, which means that it is taken into account when determining an asset split and that it may be split between the parties as part of a property settlement.

Parties almost always have differing views on the value of the items that make up the property pool. Sometimes this is a deliberate effort from one party to try and come out ahead but usually, it is a genuine belief that their idea of what something is worth is correct.

When the value of an item or items cannot be agreed, the parties will need to appoint a joint expert to provide them with a valuation. Usually, both parties will pay the joint expert's costs, however, it is not a requirement that the costs are split.

All assets and liabilities are considered when determining the total property pool. This includes real estate properties, investment properties, land, superannuation, shares, businesses, mortgages, home contents, cash in bank accounts, cars, boats and caravans. In addition, any property acquired during the relationship or any financial resource that may become available to either party in the future, may also be taken into account.

Sometimes, depending on the circumstances, it may be fair to add an amount to the property pool that is not actually there – this is called “notional property” or an “add back”. This can be relevant, for example, if one party has lost significant amounts of money gambling or has even just given money away.

The first step in finding out what your ex owns is to participate in the disclosure process. Parties to a property settlement are required under the Family Law Act 1975 to provide “full and frank disclosure” of all matters relevant to the property settlement. Section 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 set out what must be disclosed. The list includes tax returns, any interest in property (both within Australia and overseas), details of any trusts, ownership of company shares, etc. It also includes full disclosure of any liabilities such as loans, both formal and informal.

The Family Law Rules require that disclosure occur prior to the first Court date in a property matter which means that the Court may not even consider the matter until this step has been completed.

If you suspect that your ex hasn’t fully disclosed their assets and/or liabilities during the disclosure process or that they have taken steps to try and remove assets from the property pool (such as by transferring property into someone else’s name) there are a number of steps that can be taken based on what assets you believe are being hidden. You should provide your family lawyer with a list of all the assets you believe your ex is attempting to hide so that they can provide you with advice on the appropriate steps.

There are many factors which are considered when determining a fair split of the property pool. This includes things like each party's contributions (both financial and non-financial contributions such as caring for children, maintaining the home, etc.), the age and health of each party, the needs of the children of the relationship, the length of the relationship and the income and future earning potential of the parties. The Court also considers factors such as the standard of living of the parties during the relationship and their respective financial resources and obligations. The aim of the Court is to achieve a just and equitable division of the property.

This depends on a number of factors, such as the length of the relationship, the nature and extent of the contributions made by each party and whether the property was used for the joint benefit of the parties during the relationship. It is important to speak with a family lawyer as this can be a complex issue.

The Family Law Act recognises the significant contributions made by each party in a relationship, regardless of whether they were financial or non-financial. Non-financial contributions, such as taking care of the children and maintaining the family home, are considered just as important as financial contributions when determining a fair split of the property pool.

This means that if one partner has made significant non-financial contributions during the relationship, they may be entitled to a larger share of the property pool than their partner. The court will take into account the length of time the parties were in a relationship, the contributions each party made (both financial and non-financial) and their future needs.

In cases where one party has sacrificed their career or earning capacity to care for the children and support the other party's career, they may be entitled to ongoing spousal maintenance payments in addition to a share of the property pool. Spousal maintenance is financial support paid by one party to the other to help them meet their reasonable expenses following the breakdown of the relationship. The Court will consider factors such as the income and earning capacity of each party, their age, health, and future needs when making a spousal maintenance order.