When a marriage or de facto relationship ends, the assets of the relationship are divided between the parties. This is known as a property settlement. The Federal Circuit and Family Court of Australia will consider all of the assets of the relationship, including property and financial resources, when making a property settlement.
What is Property?
Property is anything that can be owned, including real estate, personal property, and financial assets. In family law, property is divided between the parties according to the contributions and future needs of a party.
What is a Financial Resource?
There is no definition of a financial resource in the Family Law Act 1975 and it can therefore be broadly interpreted, depending on the individual facts and circumstances of each case. A financial resource is often something from which a person can draw financial or monetary resources in the future. However, there must be evidence, more than a mere anticipation, of a future entitlement to money for it to be considered a financial resource.
In family law, financial resources are considered when making a property settlement, but they are not divided between the parties in the same way as property. Instead, financial resources are considered in the determination of the future needs of a party.
Examples of property include:
- Real estate, such as houses, apartments, and land;
- Personal property, such as cars, furniture, and jewellery;
- Financial assets, such as bank accounts, shares and investments.
Examples of Financial Resources include:
- The ability to borrow money;
- Future pension entitlements;
- Pending compensation or other claims;
- Anticipated inheritances;
- Beneficiary’s interest in a trust (at times).
A person does not need to have control over the future entitlement for it to be considered a financial resource.
When the Court considers financial resources in a property settlement, it will look at the following factors:
- The nature of the financial resource;
- The potential for the financial resource to generate income and when it is likely to be received;
- The needs of the parties;
- The contributions of the parties to the relationship.
It is important to understand the difference between property and a financial resource if you are going through a family law matter. This is because the way that these assets are treated in a property settlement can have a significant impact on your financial future.
If you are unsure about whether an asset is considered property or a financial resource, you should speak to one of our experienced family lawyers. Here at Gillard Family Lawyers, we have accredited specialists and solicitors experienced in the area of family law to help you manage your property settlement matters.
We pride ourselves on our expertise, so if you need legal help with a Family Law matter, simply get in touch with our friendly team and book your $220 fixed fee initial consultation.
