Most people know someone who has been affected by a family breakup. It is usually a very stressful and emotional time where people are anxious about the divorce, the property settlement and the emotional wellbeing and care arrangements for children.

Unfortunately this is reflected in a great quantity of inaccurate statements, often regarded as fact by those in the community.

Every family law situation is different and it is important that people get the right advice and are able to make informed decisions about their family and their own future before entering into any agreement or going to court.

In this article we have identified the top 5 issues where myths exist.

Myth 1: You need to be divorced before you can divide your property

There is no provision that requires a divorce to be finalised before a financial settlement can be negotiated.

You are only entitled to apply for divorce after 12 months of separation, however once you become separated you can immediately start negotiating a financial settlement.

In fact, if you have not finalised your property settlement by the time of your divorce you should do so within 12 months. There is a time limit of 12 months to apply for orders of property settlement after you are divorced.

If you do not file Consent orders or commence proceedings within that time frame you may lose your rights under the Family Law Act 1975 and be confined to seeking relief under the general law.

Myth 2: I owned it before we got together, so it’s mine if we separate

A person may not necessarily be able to keep those things in their own name that they brought into the relationship or that were paid for individually during the relationship.

The factors which must be taken into account when the Court considers how property is to be divided are set out in the Family Law Act. There is no universal equation applied, property settlement is based on all of the information provided including the various contributions made by both parties to the accumulation of the assets and the parties’ future needs, and the Court will then use its discretion in deciding the matter.

The Court may give greater weight to the individual contributions of one party in a very short relationship which may result in that party being awarded an asset that they brought into the relationship.

A lawyer practicing in family law can advise you exactly what is taken into consideration by the Court and provide you with detailed and specific advice about your individual circumstances.

Myth 3: Property will always be split 50/50 in a property settlement

This is usually the most common myth in family law. There is no rule or presumption that parties have to divide their assets equally when they separate.

As outlined above there is no universal equation applied, property settlement is based on a global assessment of the contributions and future needs factors of the parties and the discretion of the Court in deciding the matter.

The percentage outcome depends on many factors, which include:

  • The length of the relationship;
  • The financial contributions of each person;
  • The non-financial contributions of each person including as homemaker and parent; and
  • The current and future needs of each person.

The longer the relationship, the more likely it is that the Court will consider the contributions of the parties as being equal, all factors need to be considered. The reality is that an exact 50/50 split is quite rare.

Myth 4: The assets are held by a company or trust, so they are excluded from a property settlement

When a marriage or de facto relationship breaks down, the Court must assess if it is just and equitable that property be divided between the parties.

The definition of “property” is very broad under the Family Law Act. In the case of assets owned by a company or trust, the Court will look at who has control over the company or trust. Even if a person is not a director, if the entity is under the control of one of the parties the Court has the power to deal with the assets within the entity as an asset of the marriage.

Usually, assets held by a company or trust will fall within the definition of property.

Myth 5: Pre-nuptial agreements are only used in the USA

The use of Pre-nuptial agreements or “pre-nups”, as they are often known, has been popularised, sometimes sensationalised by their use in the USA. There have been plenty of newspaper stories and even movie storylines about them and their enforceability.

So, do we have them in Australia?

In fact, we do. In Australia they are known by the somewhat less sensational name of Binding Financial Agreements or BFA’s.

A BFA can be used as an asset protection mechanism by people going into a new relationship or marriage, allowing a couple to agree in advance on an acceptable division of assets. After a relationship breaks down, a BFA can attempt to reduce the financial stress of a separation and allow the couple to amicably separate without the need for costly, time-consuming and stressful court action.

However, BFA’s must be properly drafted and executed to ensure the agreed property distribution is enforceable, so it is sensible to discuss this with your lawyer to ensure your assets are protected. If a BFA is entered at the start of a 20-year relationship, the parties may have acquired completely different property or have accumulated new debts in the meantime.

More often than not, BFA’s are not enforced by the Court once the relationship breaks down due to their poor drafting, or the parties not being properly advised when they entered the agreement. A BFA may not be considered just and equitable when the Court makes an assessment of the property settlement issues between the parties. In Australia, you are far better protected by applying for Orders pursuant to the Family Law Act.


No two family law cases are the same. The Court is required to take into account the individual circumstances of each case before applying their wide discretion to make decisions.

It is important to obtain independent legal advice from experienced family law solicitors who will help you to understand the processes involved and how the law applies to your particular circumstances.

If you or someone you know wants more information or needs help or advice, please contact us on (02) 4588 5955 or email [email protected].