Some years ago, there was a news report of a married couple in Cambodia who, when separating after 40 years of marriage, agreed to divide their home and its contents by sawing the house in half. This must be the most literal interpretation of a property split.

The wife kept the half of the house that was standing, while the husband carried off the other half of the home and installed it in a nearby field.

The news report went on to state that the couple took the drastic action to saw their house in half as they felt that court proceedings to determine their property split would be too expensive.

The above story is a dramatic example, but it does capture the effect of a property split very well – upon separation, each party will walk away with a certain portion of the couple’s total asset pool.

How should married and de facto couples split their property on separation?

Under family law in Australia, there is no presumption of a 50-50 split of the couple’s total asset pool, even if parties have been married for a very long time.  Instead, the Family Court will only make an order for a property split when satisfied that “in all the circumstances, it is just and equitable to make the order”.

The key is that the proportion and manner of the property split must be “just and equitable”. In simple terms, this means what is right and fair.

The Family Court has wide discretion to determine what is “just and equitable”.  Generally, the court will go through a 4-step process to determine the proportion and the manner of the property split. This is applicable to both married and de facto couples.  This process is only a guide, and the Family Court’s powers is not confined by any “step” or “stage” in exercising its discretion and reaching a decision that is just and equitable.