Property Settlements 101: How Property Is Divided After Separation (And Who Gets the Family Pet)

When a relationship ends, one of the biggest questions is: who gets what?

Property settlements are rarely as simple as splitting everything down the middle. In Australia, the process involves a structured approach designed to reach a just and equitable outcome.

This guide walks through the key steps involved in a property settlement after separation, whether you were married or in a de facto relationship — and yes, we’ll also answer the question about the family pet.

Most people can reach agreement on how to divide property after separation, although this often involves some negotiation.

Where legal advice is required, the approach to property settlement is guided by principles set out in the legislation, as well as case law where courts have interpreted those principles and clarified how they apply in practice.

Marriage vs De Facto – Does It Matter?

In most cases, the process for dividing property is the same whether you were married or in a de facto relationship.

The Family Law Act 1975 applies to both, and the Court follows the same general principles when determining how assets should be divided.

The main differences relate to time limits:

• Married couples must commence property settlement proceedings within 12 months of divorce
• De facto couples generally have two years from separation

Aside from that, the approach to dividing property is largely the same.

Step 1: What Is There, Who Owns It, and What Is It Worth?

The first step is identifying the property pool.

This includes:

Assets, such as:
• Real estate
• Superannuation
• Companies, businesses, or trusts
• Investments
• Vehicles and personal property

Liabilities, such as:
• Mortgages
• Credit card or finance debts (including Afterpay, Zip, or similar)
• Loans owing to family members

It does not matter whose name an asset is in — the Court considers the total pool of assets and liabilities.

Everything must be properly disclosed and, where necessary, valued. Importantly, the property pool is assessed based on its current value, not the value at the date of separation.

Step 2: Is It Just and Equitable to Divide the Property?

Before dividing anything, the Court must first be satisfied that it is just and equitable to make a property settlement order.

In most separation cases, this requirement is met, as orders are usually necessary to untangle financial arrangements — such as loans, guarantees, and joint liabilities — particularly where one party intends to retain certain assets. This ensures that the other party is not left with any ongoing financial responsibility.

However, it remains an important legal step that underpins the entire process.

Step 3: Contributions – Who Brought What and Who Did What?

The Court then considers the contributions made by each party over the course of the relationship.

These are not limited to financial contributions and may include:

• Initial contributions (assets brought into the relationship)
• Financial contributions during the relationship (income, property, inheritances, or financial assistance from family)
• Non-financial contributions (such as renovations or unpaid work)
• Contributions as a homemaker or parent
• The impact of domestic and family violence on a party’s ability to make financial or non-financial contributions

Each relationship is different, and contributions are assessed in the context of the entire relationship. There is no fixed formula or percentage applied — outcomes will vary depending on the circumstances of each case.

Step 4: Current and Future Circumstances

The next step is to consider whether an adjustment should be made based on each party’s current and future needs, including issues such as spousal maintenance.

Factors may include:

• Age and health
• Income and earning capacity
• Care of children and parenting arrangements
• Financial resources
• The amount of child support that will be paid/received
• Ability to re-enter the workforce
• The need to provide housing for children

This is often where the outcome shifts, particularly where one party has ongoing care of children or reduced earning capacity.

Step 5: Who Gets What?

Finally, the Court considers the overall outcome.

The question is whether the proposed division of property is just and equitable in all the circumstances.

This may involve:

• Transferring property
• Refinancing liabilities over property
• Selling assets and dividing proceeds
• Splitting superannuation
• Making lump sum payments

In some cases, adjustments are made at this stage to ensure the final outcome is workable.    

Who Gets the Family Pet?

This is a common — and often surprisingly contentious — issue in family law.

Under Australian law, pets are treated as property, not children. The Court does not make orders for the family dog, cat, or llama to spend week-on/week-off time or share holidays between parties.

Instead, pets are considered as part of the overall property division.

In practice, however, outcomes often take into account:

• Who has been primarily responsible for the pet
• Living arrangements after separation
• Practical considerations such as space, time, and cost

While the law treats pets as property, anyone who has been through this situation knows they are often much more than that. Unsurprisingly, there have been an increasing number of cases involving disputes over pets, particularly following recent changes to the Family Law Act.

Final Thoughts

Property settlement is not a simple formula — it is a structured process aimed at reaching an appropriate outcome based on the unique circumstances of each relationship.

We often hear clients say, “I just want what is fair.” The reality is that the word “fair” does not appear in the legislation. The legal test is whether the outcome is just and equitable.

That distinction matters. Outcomes may not always feel “fair” in a traditional sense, but the law requires a result that properly reflects the circumstances of each party and allows both to move forward.

Understanding the steps involved can help you approach the process with greater clarity and confidence.

Getting it right at the time of separation can avoid costly consequences later.

In some cases, property settlements can also be formalised through binding financial agreements, depending on your circumstances.

Need Advice About Your Property Settlement?

If you’re separating or unsure how your property may be divided, it’s important to get clear legal advice early.

Our family law team can guide you through the process, explain your options, and help you reach a practical and just and equitable outcome.

👉 Contact KLM Solicitors to arrange a confidential consultation.