Glossary
Plain English
for the money side.
Every legal, financial and tax word that comes up during separation, defined the way we'd explain it across a kitchen table. If you've nodded along to a phrase you didn't quite understand, this is the page.
Legal pathway
12 terms- Arbitration
- A private alternative to court for property matters: an arbitrator hears both sides and makes a binding decision. Faster and confidential, but you give up the right to appeal except on narrow grounds.
- Binding Financial Agreement (BFA)
- A private written agreement about how assets are divided, signed by both parties with independent legal advice. Avoids court orders, but can be set aside in narrow circumstances.
- Consent Orders
- A court order made by agreement, without a hearing. Considered the most secure way to finalise a property settlement because the court has approved it as just and equitable.
- De facto relationship
- A couple living together on a genuine domestic basis. Property rights under the Family Law Act generally apply if the relationship lasted 2+ years, there's a child, or substantial contributions were made.
- Family Dispute Resolution (FDR)
- Mediation specifically for parenting matters. A s.60I certificate from an FDR practitioner is required before filing parenting proceedings, with limited exceptions.
- Initiating Application
- The court document that formally starts family law proceedings when agreement isn't reached.
- Just and equitable
- The final test in a property settlement. The outcome doesn't have to be 50/50; it has to be fair given everything that's gone before and what's ahead.
- Mediation
- A confidential negotiation with a neutral third party (often a registered family dispute resolution practitioner). Required before court for parenting in most cases.
- Property settlement
- The legal process of dividing assets, liabilities and superannuation between separating partners. Doesn't have to involve court.
- Section 75(2), also: future needs
- The future-needs factors: age, health, earning capacity, care of children, length of relationship, and more. Often shifts a settlement by 5-15% to the party with greater future need.
- Section 79, also: s.79 Family Law Act 1975
- The section of the Family Law Act that gives the court power to alter property interests between married couples after separation. Section 90SM is the de facto equivalent.
- Section 79(4), also: the four-step process
- The matters a court must consider: (a) financial contributions, (b) non-financial contributions, (c) homemaker/parenting contributions, and (e) the future-needs factors in s.75(2).
Asset pool
11 terms- Add-backs
- See Notional add-back. The general practice of bringing dissipated assets back into the pool for assessment.
- Asset pool
- Everything you and your former spouse own and owe, jointly and separately, at the time the matter is assessed. Includes super, trusts and companies you control.
- Company assets
- Assets held by a company you own or control. Generally valued and brought into the pool at net realisable value, after tax.
- Contributions
- What each of you brought to the relationship: financial (income, savings, gifts, inheritances), non-financial (renovations, work in a family business), and homemaker/parenting.
- Excluded property
- Property the court treats as outside the pool (rare). More commonly, all property is in the pool and contributions are weighted differently.
- Inheritance
- Generally treated as a contribution by the party who received it, but the weight depends on timing (early vs late in the relationship) and whether it was intermingled with joint finances.
- Initial contributions
- What each party brought into the relationship at the start. Weighted more heavily when the relationship is short or the contribution is large and identifiable (e.g. a property at the outset).
- Loan accounts
- Money a party has lent to (or borrowed from) a family trust or company. Often substantial and easily missed; sits on the company/trust balance sheet.
- Notional add-back
- Where money one party has spent (e.g. on gambling, a new partner, or legal fees beyond what's reasonable) is treated as if it's still in the pool. Less common since recent case law, but still argued.
- Post-separation contributions
- Contributions made after separation but before settlement, such as one party paying the mortgage or maintaining the home. Recognised in the contributions assessment.
- Trust assets
- Assets held in a family trust. The court looks at who actually controls the trust; if it's an 'alter ego' of a party, the assets may be treated as theirs.
Superannuation
9 terms- Accumulation fund
- A super fund where your balance is your contributions plus investment returns, less fees and tax. Most Australians are in one. Easy to value and split.
- Binding death benefit nomination
- A formal instruction telling your super fund who gets your super and any insurance inside it if you die. Often still names a former spouse, update it.
- Condition of release
- A legal trigger that lets super be paid out: retirement after preservation age, age 65, permanent incapacity, terminal illness, or compassionate grounds.
- Defined benefit fund
- A super fund where retirement payment is calculated by a formula (years of service × salary), not a balance. Common in government and older corporate schemes. Splitting requires an actuarial valuation.
- Flagging order
- A holding pattern: the super fund is told not to pay anything out until the flag is lifted. Used when a value is uncertain or a defined-benefit interest hasn't yet vested.
- Preservation age
- The age at which you can access super (currently 60 for anyone born after 1 July 1964). Splitting doesn't change this; you still can't touch the money early.
- Self-managed super fund (SMSF)
- A super fund you run yourself, typically with 1-6 members. After separation, both parties usually need to exit or restructure; trustee duties continue throughout.
- Splitting order
- A court order (or term in a BFA/consent orders) that directs a super fund to pay a portion of one member's interest to the other. The fund must be notified and given procedural fairness.
- Superannuation splitting
- The legal mechanism that allows super to be divided between separating partners. Super is treated as property under family law and can be split by agreement or court order.
Tax
5 terms- CGT rollover relief, also: Marriage breakdown rollover
- A provision that defers capital gains tax when assets are transferred between separating spouses under a court order, consent orders or a BFA. Without it, transfers can trigger a tax bill.
- Division 7A
- Tax rules treating loans from a private company to a shareholder as a deemed dividend. Relevant when business assets are being unwound through a settlement.
- Main residence exemption
- The tax rule that exempts your home from CGT. After separation, both parties can usually keep claiming it on different homes for up to 6 years in certain cases, get advice.
- Pre-CGT asset
- An asset acquired before 20 September 1985, generally exempt from capital gains tax. Status can be lost if the asset is significantly improved or restructured.
- Stamp duty exemption
- Most states waive stamp duty on property transfers between separating spouses if done under a formal order or BFA. Informal transfers don't qualify.
Parenting & support
5 terms- Care percentage
- The proportion of nights per year each parent has the child. A key input into the child support formula.
- Child support
- Periodic payments from one parent to the other for the costs of raising children. Administered by Services Australia using a statutory formula based on incomes and care percentages.
- Parenting orders
- Court orders setting out who the child lives with, spends time with, and who has parental responsibility. Sit alongside, but separate from, property settlement.
- Parenting plan
- A written, signed parenting agreement that's not legally enforceable on its own but is taken into account by a court. Less formal than consent orders.
- Spousal maintenance
- Periodic or lump-sum payments from one former spouse to the other to support their living costs, where they can't reasonably support themselves and the other has capacity to pay.
Estate & protection
4 terms- Enduring guardianship
- The medical/lifestyle equivalent of an EPOA, appoints someone to make health and personal decisions if you lose capacity. Update after separation.
- Enduring power of attorney
- A legal document allowing someone else to make financial decisions for you. Almost always granted to a spouse, revoke and replace it after separation.
- Family Provision claim
- A claim against an estate by an eligible person who feels they were inadequately provided for. Former spouses can sometimes claim; updating your will reduces ambiguity.
- Will
- A legal document directing where your assets go on death. Marriage usually revokes an existing will; separation often doesn't. Update yours after separating.
Banking & day-to-day
4 terms- Joint and several liability
- Both parties are individually liable for the full amount of a joint debt. The bank can pursue either of you, regardless of who 'should' have paid.
- Offset account
- A transaction account linked to your home loan. Money sitting in it reduces the interest charged on the loan while remaining accessible cash. Watch who has access after separation.
- Redraw facility
- Extra repayments on a home loan that can be withdrawn. Different from an offset; redrawn funds are 'new' borrowing for tax purposes.
- Severing a joint tenancy
- Converting jointly-owned property from joint tenancy (survivorship) to tenants in common (your share goes via your will). A common first step after separating.
Process & evidence
5 terms- Affidavit
- A written statement sworn or affirmed as true, used as evidence in court. Most family law evidence is filed this way before any hearing.
- Disclosure, also: Duty of disclosure
- The legal obligation to fully and honestly share all your financial information with the other party. Hiding assets has serious consequences, including costs orders and adverse findings.
- Financial Statement, also: Form 13
- The court form summarising your income, expenses, assets and liabilities. Sworn or affirmed; updated if circumstances change.
- Subpoena
- A court order requiring a person or organisation (bank, employer, super fund) to produce documents or give evidence. Used when disclosure has been incomplete.
- Valuation
- A formal opinion of value, usually by a single expert appointed jointly. Common for real estate, businesses, defined-benefit super interests, and significant chattels.
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