What is considered ‘property’ under the Family Law Act?

When undertaking division of a matrimonial pool pursuant to the Family Law Act, the Family Court undertakes a 4-step process, as follows:

1. Ascertaining and valuing the asset pool;
2. Looking at the respective contributions of each party;
3. Making adjustments (if needed) to take into account the future needs of each party; and
4. Ensuring that the division reached is ‘just and equitable’.

Obviously, in undertaking step 1, it is necessary to itemize every item of property owned by the parties.

What is deemed as property?

But what, exactly, is considered property in that context? The diamond brooch you inherited from old Aunt Agnes? The options you have that have not yet matured? The interest you have in the family trust as a discretionary beneficiary, and from which you’ve not received a benefit in many years? The shares you purchased in your child’s name with a view to them ultimately paying for university?

There are a number of rules to consider:

1. Asset or financial resource? – any item classified as an asset or property, generally, has a realisable value as at today. A financial resource, on the other hand, may provide a source of finances or financial support in the future. This area is obviously tricky where, for example, bonds and options are considered (for example, they may not have been exercised, but still saleable), and if you have such items, you should consult a Family Lawyer.
2. In whose name is the item? For all intents and purposes, the Family Court isn’t too concerned with whose name an asset happens to be in. It’s far more interested in who is the ultimate beneficiary. Accordingly, items held on trust for you by another party, items owned by a company of which you are sole shareholder, and items not in your possession but to which you are nonetheless legally entitled, all go in the pool.
3. The value of the item? If the task of assessing the contents and value of the matrimonial pool involved itemizing every fork and every article of clothing, no case in the Family Court would ever be concluded. As a general rule, we use $5,000 as a minimum figure for items that should be included, though this is of course dependent on the value of the pool overall and context.
4. Superannuation – superannuation is viewed in a category of its own for family law purposes, and special regulations operative pursuant to the Family Law Act are in place that set out how such interests are considered and valued.

 Conclusion

If you have any grey areas, and are not sure how certain items or interests of either you or your former partner will be characterized, you should talk to a Family Lawyer. Get in touch and we can assist.