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The ‘Four Step Process’
in family law

Essentially the Family Law Act allows the court to make orders “as it considers appropriate to change the interests of the parties in property”. In determining what is appropriate a ‘four step process’ is applied. These steps are outlined in detail below.

Identify and value the assets, liabilities and financial resources of both parties. These include all assets the parties are beneficially entitled to whether they be in joint names, sole names or held jointly with a third party or through trusts or corporation.

Look at the contributions made by each of the parties including:

  1. Financial contributions. This category can be broken into three sub-categories:
    1. initial contributions;
      The assets and liabilities that each party had when they started living together.
    2. contributions made during the relationship;
      financial contributions made or received (for example and inheritance or gift from parents) by the parties during the relationship.
    3. post-separation contributions.
      Financial contributions made for the benefit of the relationship/family after the parties had separated for example continuing to pay a mortgage over a home occupied by the other party.
  2. Non-financial contributions
    This category includes contributions such as physically labouring on home renovations which increases the value of the home.
  3. Homemaking and parenting contributions.

The law does not give more or less weight to this type of contribution than to any other type. For example, one party could stay at home and look after the children and house while the other goes out and earns $200,000 per annum. The court will consider such contributions as being equal as each party was undertaking their role for the benefit of the family. The employed party could not do their job if the other party was not looking after the young children.

All types of contributions can be made by or on behalf of a party. For example, one parties parents may have provided money towards the purchase of a home or physically laboured on that home to increase its value.

Decide whether an adjustment should be made because one of you has greater needs than the other by virtue of factors such as the care of young children, lower income, or one party having more financial resources than the other.
Check that the proposed orders are just and equitable in all the circumstances
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