When a relationship ends and the asset pool runs to many millions, the first question most people ask is simple: will it be split down the middle? The honest answer is that Australian family law has no such rule. The court asks a series of questions about the parties' property, their contributions and their futures, and the answer emerges from the facts.
For families with significant and complex wealth, each of those questions is harder to answer than it looks. This article explains how the law works, what changed when amendments to the Family Law Act 1975 (Cth) took effect on 10 June 2025, and where the real contests tend to lie.
This is general information, not legal advice. Every matter turns on its own facts.
The legal framework
Property settlement between married couples is governed by section 79 of the Family Law Act. De facto couples are covered by equivalent provisions in Part VIIIAB, with near-identical principles. Before the 2025 amendments, the steps the courts followed were largely a product of case law, most notably the High Court's decision in Stanford v Stanford (2012), which emphasised that the court must first be satisfied it is just and equitable to make any order at all.
From 10 June 2025, the Act itself sets out the approach. In short, the court must:
- Identify the property and liabilities
The existing legal and equitable interests of each party, and what they owe. - Consider contributions
Financial and non-financial contributions to the property, and contributions to the welfare of the family, including as homemaker and parent. - Consider current and future circumstances
A list of factors including age, health, income, earning capacity, care of children, and financial resources. - Be satisfied the order is just and equitable
In all the circumstances.
The amendments did not create a new system. But they did make several matters express considerations for the first time, which is significant for complex matters.
What changed in June 2025
The Family Law Amendment Act 2024 made a number of changes to property law. The most important for high net worth matters are these.
Family violence and its economic effect
The court must now consider the effect of family violence on a party's ability to make contributions, and on their current and future circumstances. Economic and financial abuse (controlling money, restricting access to accounts, sabotaging a partner's career) is within the Act's definition of family violence.
Wastage and liabilities
The court must consider any material wastage of property or financial resources by a party, and the circumstances in which liabilities were incurred. This matters where one party has lost money through reckless investment, gambling, or spending after separation, or has incurred debts for their own benefit.
Housing for children
The need to provide appropriate housing for children under 18 is an express consideration in assessing future circumstances. In practice, this often supports an adjustment in favour of the parent with primary care.
Companion animals
Pets are now dealt with under specific provisions. The court can order that a companion animal be kept by one party, or sold, but not that it be shared.
Disclosure
The duty of full and frank disclosure of financial information, previously in the court's rules, is now in the Act, reinforcing its importance.
Less adversarial trials
Property matters can now, with consent, be conducted using a less adversarial trial process that has long applied in parenting matters.
For most high net worth cases, the practical effect is not a dramatic shift in outcomes, but a clearer structure, and a set of arguments that can now be put with explicit statutory support.
Step one: identifying the asset pool
In simple matters, identifying the property is straightforward. In complex matters, it is often where the most important contest lies.
Discretionary trusts
The assets of a discretionary trust are legally owned by the trustee, not by any beneficiary. But the High Court held in Kennon v Spry (2008) that where a party effectively controls a trust (for example, as trustee with the power to distribute the assets to themselves) the trust's assets may be treated as that party's property.
Where control is shared with others, or held by third parties such as parents, the trust is more likely to be treated as a financial resource. A financial resource is not divided directly, but it can be taken into account in assessing future circumstances, which may justify a larger share of other property for the other party.
The difference between property and resource can be worth millions. It turns on the trust deed, who holds the roles of trustee and appointor, and how the trust has actually been operated.
Companies, loan accounts and Division 7A
A shareholding in a private company is property; its value depends on the company's value. But companies also generate loan accounts (amounts owed by or to the shareholders) and, where shareholders have borrowed from the company, Division 7A loans with tax consequences.
Mischaracterising a loan account can move value from one party to the other. A loan owed by a party to the company is a liability of that party but an asset of the company. The two must be analysed together.
Superannuation
Superannuation is treated as property for family law purposes and can be split by order or agreement. Defined benefit interests and self-managed funds require particular care: the former because of valuation rules, the latter because of the assets and trustee roles involved. We explain this further in our article on superannuation splitting.
Overseas assets
The Act applies to property wherever it is located. Overseas real estate, bank accounts and investments must be disclosed and included in the pool. Orders are generally made against the parties personally (for example, requiring a party to sell or transfer an asset) and enforcement abroad may require local legal assistance.
Add-backs and dissipated assets
Where one party has spent or disposed of property after separation, the court may in limited circumstances "add back" that amount, treating it as though it were still in the pool. Since June 2025, material wastage is an express consideration, which provides a clearer basis for adjustment where add-backs are not appropriate.
Step two: contributions
Contributions are assessed across the entire relationship, not just at its beginning or end.
Initial contributions
Property brought into the relationship is a contribution by the party who brought it. Its weight tends to diminish over a long relationship, particularly where it has been intermingled with family assets. In shorter relationships, it can be decisive.
Inheritances and gifts
An inheritance received during the relationship is usually treated as a contribution by the recipient. How much weight it carries depends on when it was received, whether it was kept separate, and how it was used. An inheritance received shortly before separation and kept separate is often treated very differently from one received early and used to buy the family home.
Business growth
Where one party built or grew a business, their contribution is significant. But Australian courts have moved away from treating the entrepreneurial "special skill" of one party as outweighing the homemaking and parenting contributions of the other. Both are contributions, and both are weighed.
Homemaker and parent
The Act expressly recognises contributions to the welfare of the family. In long relationships where one party focused on the home and children while the other built wealth, these contributions are given real weight.
Family violence
Where family violence made one party's contributions more arduous, or reduced their ability to contribute, that is now expressly relevant.
Step three: current and future circumstances
Having assessed contributions, the court considers each party's current and future circumstances. The factors include:
- age and state of health;
- income, property and financial resources, and physical and mental capacity for employment;
- whether either party has the care of children under 18;
- commitments necessary to support themselves and others;
- the need to provide appropriate housing for children;
- the economic effect of family violence;
- a standard of living that is reasonable in all the circumstances;
- the duration of the relationship and its effect on each party's earning capacity; and
- financial resources, including interests in trusts not treated as property.
In high net worth matters, a disparity in earning capacity (one party earning a very high income, the other with limited prospects after years out of the workforce) can justify a significant further adjustment. So too can a trust or inheritance that is treated as a financial resource rather than property.
Step four: just and equitable
Finally, the court must be satisfied that the proposed division is just and equitable. This is not a rubber stamp. It requires the court to stand back and look at the overall result, including how liquid each party's assets are, and whether the orders can practically be carried out.
Where the real contests lie
In our experience, disputes in complex matters rarely turn on the legal principles themselves. They turn on the facts and the numbers.
Valuation
Two expert valuers can reach very different values for the same business, depending on their assumptions about maintainable earnings, owner remuneration, the capitalisation rate, and whether goodwill is personal to the owner. Testing those assumptions is one of the most valuable things a family lawyer can do.
Disclosure
Complete disclosure is the foundation of a fair settlement. Where the other party controls the family's financial information, subpoenas and forensic accounting may be needed.
Tax
Transfers under family law orders or binding financial agreements can qualify for capital gains tax rollover relief and, in NSW, exemption from transfer duty. But the party who receives an asset under rollover also receives its embedded tax liability. A settlement that looks equal before tax may be unequal after it.
Liquidity
An outcome that leaves one party with the family's cash and the other with an illiquid interest in a company is rarely fair, even if the percentages match.
Timing
Because assets are generally valued at the time of settlement or hearing, rising or falling markets, and deferred bonuses or options that vest over time, can shift the balance.
Practical steps if you are separating
- Get advice early, before making decisions about the home, the business or trust distributions.
- Gather documents: tax returns, financial statements, trust deeds, company constitutions, loan agreements and superannuation statements.
- Preserve the pool
Avoid transactions that could be seen as dissipating assets. If you fear the other party will do so, ask about urgent injunctions. - Review your estate plan
Wills, super nominations and powers of attorney should be revisited on separation. - Mind the deadlines
Married parties have 12 months from the divorce order taking effect; de facto parties have two years from separation.
How we can help
Our high net worth divorce practice is built for complex asset pools. We work with forensic accountants, valuers and tax advisers, and we coordinate with your existing advisers. For clients planning ahead, our asset protection and property settlement advice can prevent many of these issues from arising.
This article is general information about the law as at the date it was last reviewed. It is not legal advice and does not take your circumstances into account.