Updated: 18 hours ago
Family breakdowns are never easy. Whether you’ve experienced one personally or know someone who has, separation and divorce bring emotional, financial, and legal challenges. Unfortunately, in the world of online content at our fingertips, misinformation about property settlements is widespread and often causes unnecessary stress and confusion.
Every family law situation is unique, so get accurate legal advice before making decisions about your future. Remember that every jurisdiction has different requirements, timeframes, and rights, and what you hear online may not apply to your circumstances.
Let's break down five common myths about family law property settlements so you can separate fact from fiction.
Important Note: This article details the rules, regulations and legal rights and obligations relevant to Queensland, Australia.
In This Article:
Myth 1: 'Prenuptial Agreements' Don't Exist In Australia
Binding financial agreements (BFAs) are Australia’s version of what people commonly call a 'prenuptial agreement'. They are a practical solution that lets you and your partner decide in advance how you'll handle assets and finances if the relationship breaks down.
These agreements are commonly used:
Before marriage or moving in together
During a relationship or marriage
After separation to avoid Court disputes
When properly drafted and executed, BFAs can provide clarity and financial security and reduce the risk of costly legal disputes. However, both parties must receive independent legal advice to ensure the agreement is enforceable.
Myth 2: If I Owned It Before The Relationship, It’s Automatically Mine After Separation
Just because you owned an asset before your relationship doesn't mean you will automatically keep it after separation.
The Federal Circuit and Family Court of Australia will consider all contributions, financial and non-financial, when determining a property settlement. This means that assets brought into the relationship can still be subject to division.
However, in short relationships, the Courts may give greater weight to initial contributions. In longer relationships, assets often become more intertwined and harder to attribute to one person, and contributions (such as home upkeep and childcare) are considered just as valuable as financial contributions.
Myth 3: Property Settlements Are Always 50/50
No automatic rule requires assets to be split evenly between separating partners.
The division of property depends on various factors, including:
The length of the relationship
Each party’s financial contributions (e.g., income, property ownership)
Each party’s non-financial contributions (e.g., parenting, homemaking)
The future financial needs of each person
While a long-term relationship may lead to a more equal division of assets, we assess every case individually.
A 50/50 split is not the default outcome.
Myth 4: You Must Be Divorced First
You don't need to wait until a divorce is finalised to start negotiating your property settlement.
Once you and your partner separate, you can start dividing your assets immediately. It's important to remember that there are strict time limits that apply:
Married couples must finalise their property settlement within 12 months of their divorce being granted
De facto couples have 24 months from the date of separation to settle their property matters.
If you don’t finalise your settlement within these time limits, you may need to seek special permission from the Court.
Myth 5: Assets Held In A Company Or Trust Are Automatically Safe
Holding assets in a company or trust does not always keep them out of a property settlement.
The Federal Circuit and Family Court of Australia can examine assets held in trusts or companies, especially if one partner controls the entity, when making a decision. If the Court finds that a party effectively controls the assets, it can include them in the property pool for division.
This means that even if assets are held in a company or trust, they may still be subject to a property settlement. Engaging a reputable, experienced family lawyer can help ensure any assets that must be protected are placed in the right structures to mitigate risk before a relationship breaks down. Better still, when creating trusts, registering companies, or setting up other structures, seek proper financial and legal advice to ensure they meet your needs.
Get the Right Legal Advice
Every family law matter is unique, and the myths above are just a few of the common misconceptions we hear from potential clients. The Courts assess property settlements based on individual circumstances to ensure a fair and just outcome for everyone involved.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current, and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication are those of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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