The Four Steps – How does a court determine a fair property settlement?

By Jonathon Naef, Lawyer

When a relationship ends, uncertainty can set in. You may wonder how you and your partner will divide your property and whether there is a “right way”. You may ask “What next? What am I entitled to? What is “fair”?

We always encourage our clients to stop, reflect and refocus at this time. Think about your goals, priorities and interests. Where do you want to be in 12 months’ time? What is important to you and why?

Sometimes it can be hard to know where to start and an awareness of how the law is generally applied when parties separate, can be helpful.

Under the law, the division  of property at the end of a marriage or de facto relationship is usually determined through the following four step process:

Step 1 – Determining the property pool

This is done by listing all of the assets, liabilities and superannuation interests owned solely by you and your former spouse, and jointly with one another or any other person.

Our Property Calculator can be really helpful to record this information and it can be downloaded here.

Step 2 – Consider the contributions

Contributions to a relationship can be financial (i.e. income,  running a business, money received from family or even a compensation payment. etc), non-financial (i.e. renovating the house) or carer/homemaker contributions (caring for children, cooking and cleaning).

When contemplating contributions, it’s very important that is not approached as a dollar-for-dollar accounting exercise. Also, it is equally important to be mindful that one type of contribution is not more valuable than another (i.e. financial contributions are not more valuable than carer contributions).

This also includes initial contributions to the relationship and post-separation contributions. You can read more about those here.

Step 3 – Determining Future Needs

The third step is to assess the future needs. This includes looking at a range of factors including:

  • Age and health;
  • Earning capacity;
  • Any financial resources a party may have;
  • Continued care for children under 18; and
  • New partners and their financial circumstances.

Step 4 – Is it just and equitable?

After considering all the above it must be determined whether it is fair in all the circumstances for an adjustment to be made to the parties’ entitlement to property. What all this means is that the entire process is reality tested: Does it work? Will both parties be ok?

It’s really important to remember a few things before you get out the pen and paper:

  1. Your partner also has goals, priorities and needs. Consider your perspective and theirs too.
  2. You and your partner can come up with any outcome that suits you. It’s your family and you can create your own steps that work for you.
  3. Be aware that it can be very easy to become attached to an idea and sense of entitlement, such as keeping the house. Think about what happens if your partner also becomes attached to a certain outcome? You don’t want to end up opponents in conflict. Flexibility and being open to many possibilities us a great mindset to adopt from the get-go.
  4. You and your partner’s relationship isn’t over yet – it’s just changed. You still have a lot in common and sorting out your finances is one of them. Where possible, try and work together as a team to resolve property matters.

For more information about how the four steps apply to your circumstances give us a call here. Our lawyers can discuss your needs and goals with you and help you finalise your settlement agreements quickly and cost-effectively.


Scroll to Top


Finalist - Corporate Kindness Awards

Issued by Corporate Kindness Awards · Winners announced April 2022

Winner - Sole Practitioner of the Year

Issued by Australian Law Awards · Dec 2021

Winner – Partner of the Year (Family Law)

Issued by Lawyers Weekly Partner of the Year Awards · Nov 2021

Winner - Service Business Award

Issued by Ausmumpreneur Awards · Sep 2021

Winner - Service Business of the Year

Issued by Roar Awards · Sep 2021

Winner - Innovation Award for Legal Education and Change Initiatives

Issued by APAC Insider · Aug 2021

Winner - Top Boutique Law Firm 2021

Issued by Australasian Lawyers · Aug 2021

Winner- Boutique Law Firm of the Year

Issued by APAC Insider · Aug 2021

Finalist - Boutique Law Firm of the Year

Issued by Australian Law Awards · Jun 2021

Finalist - Innovator of the Year Award (Company)

Issued by Australian Law Awards · Jun 2021

Finalist - Innovator of the Year Award (Individual)

Issued by Australian Law Awards · Jun 2021

Finalist – 30 Under 30 Award (Family Law)

Issued by Lawyers Weekly 30 under 30 Awards · Apr 2021

Winner - Rising Stars in Family Law

Issued by Global Corp Media · Mar 2021

Finalist -Rising Star Ausmumpreneur of the Year

Issued by Ausmumpreneur Awards · 2021

Finalist -Social Change Hero

Issued by Roar Awards · 2021

Winner - Boutique Law Firm of the Year

Issued by Australian Law Awards · Sep 2020

Winner - Family Law Firm of the Year

Issued by Corporate Live Wire · Sep 2020

Winner - Service Business Award

Issued by Ausmumpreneurs · Sep 2020

Winner -Emerging Mumpreneur

Issued by Ausmumpreneur · Sep 2020

Finalist - Sole Practitioner of the Year

Issued by Australian Law Awards · Aug 2020

Winner - Rising Stars of Family Law

Issued by APEC Insider · Jul 2020

Winner – Family Law Firm of the Year (Australia)

Issued by International Advisory Experts (IAG) 2020

Outside of Balance, I am an adjunct lecturer and assessor with the College of Law in the ACT. In this role, I lecture and mentor future lawyers in the ACT and surrounding regions, as they complete their Practical Legal Training (which is the course you are required to complete to be able to practice as a lawyer).

When I am not lawyering I love to travel and have already made it to 18 countries across Europe and Asia. My personal goal is to travel to every continent, including Antarctica. My favourite destination so far is Lauterbrunnen in Switzerland, where I skydived over the Swiss Alps!

My innovative approach to law has seen me, and Balance Family Law recognised with over 23 national and international awards and accolades since 2020 including the prestigious Lawyer’s Weekly Family Law Partner of the Year 2021, Australian Law Awards Sole Practitioner of the Year 2021, Australian Law Awards Boutique Law Firm of the Year 2020 and the Gold Ausmumpreneur Award for a Service Business in 2020 and 2021. I have also received consecutive Chief Minister’s Awards for Excellence for my work with families and children on the frontline during my time working in child protection. In 2022 and 2023, I was invited to be a Judge at the Lawyers Weekly 30 Under 30 Awards, and Partner of the Year Awards, and the National Ausmumpreneur Awards.

As one of Australia’s most respected family lawyers and a gamechanger in the lawyer space, I look forward to working with you to navigate this challenging time in your life.