A guide for individuals, business owners, and their professional advisers
When a relationship ends, and the financial interests involved are substantial, family law becomes one of the most consequential legal disciplines you will encounter. The decisions made in the months following separation — about property, business interests, children, and financial arrangements — will shape outcomes that endure for decades.
This guide is written for individuals navigating a complex family law matter, and for the professional advisers — accountants, financial planners, corporate solicitors, private wealth managers — who advise them. It is not a general introduction to divorce. It is a substantive reference for circumstances where the stakes are high, the asset structures are sophisticated, and the legal and financial decisions require careful, informed handling.
Koffels has acted in some of Australia’s most significant family law proceedings. The nature of that work means we will not discuss it publicly. That same discretion applies to every client we represent.
1. The legal framework
Family law in Australia is governed primarily by the Family Law Act 1975 (Cth), which applies to married couples and, in most respects, to de facto couples who have been in a qualifying relationship. The legislation is federal — the same substantive law applies regardless of which state proceedings are heard in.
Since the merger of the Family Court of Australia and the Federal Circuit Court of Australia in September 2021, family law proceedings at first instance are heard in the Federal Circuit and Family Court of Australia (FCFCOA). Appeals lie to the Full Court of the FCFCOA, and from there to the High Court of Australia in appropriate cases.
The Family Law Amendment Act 2024 introduced the most substantial reform to the legislation in a generation — including significant changes to the best interests framework for children, reforms to how family violence is assessed and weighted in parenting proceedings, and new provisions dealing with companion animals. These changes commenced in stages through 2024 and 2025.
Australian family law does not follow a formula. Courts have broad discretionary powers, particularly in property matters. The outcome in any given case depends on the specific facts, the quality of the evidence, and the skill with which the matter is presented and negotiated. That discretion is both the strength and the complexity of the system.
2. Property settlement
Property settlement is the process by which the financial relationship between separated parties is brought to an end. For most high-net-worth individuals and business owners, it is the most consequential aspect of the entire process — more so than the divorce itself, which is a largely administrative procedure.
The four-step framework
Courts approach property settlement through a well-established analytical framework developed through case law and embedded in practice.
Step 1 — Identify and value the asset pool. All property and financial resources are identified and valued, including interests in trusts, companies, superannuation, and overseas property. What is included — and how it is characterised — can determine the entire shape of a settlement.
Step 2 — Assess contributions. Courts consider what each party contributed to the acquisition, conservation, and improvement of the assets, both financially and non-financially. In long marriages involving substantial wealth, contributions analysis can be highly contested.
Step 3 — Consider future needs. Courts adjust for the relative circumstances each party faces going forward — earning capacity, care of children, age, health, and any other relevant factor. Where there is significant income disparity or where one party has made substantial career sacrifices, this step can produce material adjustments.
Step 4 — Assess whether the outcome is just and equitable. A final check is applied. An outcome that the arithmetic of the previous steps produces but that would be plainly unjust in all the circumstances will not stand.
Both parties are subject to a duty of full and frank financial disclosure under the Family Law Act and the Federal Circuit and Family Court of Australia (Family Law) Rules 2021. The obligation is ongoing and extends to all assets, liabilities, income, and financial resources — including interests in entities and overseas holdings. Courts treat non-disclosure seriously, with powers to draw adverse inferences, set aside settlements, and in appropriate cases refer conduct for contempt proceedings.
3. Business interests in property settlement
For business owners, the most consequential questions in property settlement cluster around four issues: whether and how the business is valued, how goodwill is treated, how shareholder arrangements interact with family law orders, and how post-separation changes in business value are handled.
Valuation of privately held businesses
Unlike publicly traded companies, the value of a private business cannot be read from a market price. It must be determined by a forensic accountant applying one or more recognised valuation methodologies — typically capitalisation of maintainable earnings, discounted cash flow, or an asset-based approach, depending on the nature of the business.
The assumptions underlying any valuation — the choice of earnings multiple, the discount rate, the treatment of owner-manager remuneration, the normalisation of one-off items — can produce dramatically different results. In contested matters it is common for the parties’ respective experts to produce valuations that differ substantially, sometimes by multiples. The court must then assess the competing evidence and arrive at a figure it regards as appropriate.
Goodwill — personal versus enterprise
Personal goodwill is the value attributable to the skills, reputation, and relationships of the individual business owner. It is not transferable and is generally excluded from the family law asset pool — it cannot be realised independently of the individual.
Enterprise goodwill — value that inheres in the business itself, its systems, client base, brand, and established processes — survives a change of ownership and is included in the asset pool. The boundary between the two is frequently contested in professional practices where the business’s value is substantially built on the reputation and relationships of its principals.
Shareholder agreements
Where a business owner’s interest is subject to a shareholder agreement, the interaction between that agreement and family law proceedings requires careful analysis before any settlement is structured. Pre-emption rights, drag-along provisions, buy-sell mechanisms, and restrictions on transfer may all be directly affected by court orders or a negotiated settlement.
Courts have broad powers under the Family Law Act to make orders affecting third parties including co-shareholders, but those powers operate alongside the contractual rights created by the shareholder agreement. Structuring a settlement that achieves its financial objective without triggering adverse consequences under the agreement requires close coordination between family law and corporate law expertise — an area where Koffels’ full-service capability is directly relevant.
Post-separation changes in business value
Where a business increases significantly in value between separation and settlement through the post-separation efforts of one party, courts generally do not treat that increase as part of the pool available for division. Where the increase reflects the natural appreciation of an asset acquired during the relationship, the position is more nuanced. The specific facts and the degree to which the increase is attributable to post-separation effort versus underlying asset value determine the outcome.
4. Discretionary trusts
The treatment of discretionary trusts is one of the most technically complex and actively litigated areas of Australian family law. The law has shifted significantly over the past two decades and continues to develop.
Kennon v Spry [2008] HCA 56 established that courts look beyond formal legal structure to assess the substance of a party’s relationship with a trust. Where a party effectively controls a trust — as trustee, appointor, or through informal influence over its operations — the court may treat trust assets as property available for settlement rather than merely as a financial resource.
Woodcock & Woodcock [2021] extended this analysis significantly. The court found that even where a party lacked formal control over a discretionary trust, evidence that they had influenced the trust’s operations and derived significant income from it was sufficient to characterise their interest as property rather than a mere financial resource — bringing assets held in a structure specifically designed to be beyond the beneficiary’s formal control into the pool available for division.
The specific trust deed, the history of distributions, the nature and extent of the party’s influence, and the interests of other beneficiaries all bear on how a trust will be treated. There is no single answer that applies across all structures.
Further reading: Discretionary trusts and preserving assets after Woodcock v Woodcock →
Superannuation and SMSFs
Superannuation is treated as property for family law purposes. Both accumulation and defined benefit interests can be the subject of splitting orders, either by agreement or by court order. Self-managed superannuation funds introduce additional complexity — the SMSF’s trust deed governs how the fund operates, and where the fund holds illiquid assets, the mechanics of splitting can become complicated. Early engagement of the SMSF’s accountant and auditor is advisable.
5. Binding Financial Agreements
A Binding Financial Agreement (BFA) is a private contract between parties that deals with how financial matters will be resolved in the event of separation. BFAs can be made before a relationship begins, during it, or after it ends. When properly drafted and executed, they operate to exclude the court’s jurisdiction over the matters they cover.
BFAs are the primary financial planning tool available to individuals entering significant relationships with substantial assets, business interests, or inherited wealth. For business owners in particular, a well-drafted BFA provides certainty that a future separation will not disrupt the business, expose co-owners to litigation, or require a forced sale of assets.
Requirements for enforceability
The Family Law Act imposes strict requirements. Each party must receive independent legal advice from a separate solicitor before signing, with a signed certificate confirming the advice was given covering the advantages and disadvantages of the agreement for that party. The agreement must be in writing and signed by both parties.
Courts have set aside BFAs on grounds including undue influence, unconscionable conduct, fraud, material non-disclosure, and defects in the independent legal advice. A BFA executed under time pressure — for example, in the days immediately before a wedding — attracts particular scrutiny. The history of BFA litigation in Australia includes a significant number of agreements set aside because the advice given was inadequate, rushed, or not genuinely independent.
For clients with significant assets, a BFA should address the treatment of pre-relationship assets and any appreciation in their value, the treatment of business interests and the mechanism for dealing with them on separation, any inherited or expected inheritances, the basis on which maintenance will or will not be payable, and provisions for review as circumstances change.
6. De facto relationships
De facto relationships are treated similarly to marriages under the Family Law Act for property and maintenance purposes, with some important differences in timing and jurisdiction.
A de facto relationship exists where two people who are not married live together on a genuine domestic basis. For property and maintenance rights to arise, the relationship must generally have lasted at least two years, or a child must have been born of the relationship, or one party must have made substantial contributions. Applications for property settlement must be made within two years of the end of the relationship.
A long-term domestic arrangement — even one not formalised as a marriage — gives rise to the same financial rights and obligations. A BFA is as relevant, and often more urgently needed, for parties in de facto relationships as for those who are married.
7. Cross-border and international matters
For clients with assets, children, or connections across multiple jurisdictions, family law matters introduce an additional layer of complexity requiring careful navigation.
Jurisdiction
Australian courts can make orders in relation to overseas assets in a range of international circumstances, though enforcement in foreign jurisdictions requires engagement with the legal systems of those countries. For parenting matters, jurisdiction is generally determined by where the children are habitually resident.
The Hague Convention on International Child Abduction
Australia is a signatory to the Hague Convention on the Civil Aspects of International Child Abduction. Where a child is wrongfully removed from or to Australia from a signatory country, the Convention provides a mechanism for the summary return of the child to their country of habitual residence. Applications are heard urgently and proceed on a different basis from ordinary parenting proceedings.
International relocation
Where one parent seeks to relocate internationally with a child following separation, the court must balance the rights of the relocating parent against those of the remaining parent and, above all, the best interests of the child. The outcome turns heavily on the reasons for relocation, the proposed arrangements for maintaining the relationship with the other parent, and the practicalities of contact across jurisdictions.
Property held overseas
Australian courts will generally include overseas property in the asset pool and can make orders requiring its transfer or sale. Whether those orders can practically be enforced in the relevant foreign jurisdiction is a separate question. In matters involving significant overseas assets — particularly property in jurisdictions with their own matrimonial property regimes — coordinated legal advice in both jurisdictions is essential.
8. Parenting arrangements after separation
Parenting matters are governed by Part VII of the Family Law Act, which requires courts to regard the best interests of the child as the paramount consideration. The 2024 amendments significantly restructured the best interests framework, replacing the previous presumption of equal shared parental responsibility with a more flexible approach focused directly on the child’s individual circumstances.
What courts consider
In determining what parenting arrangements serve a child’s best interests, courts consider the child’s views weighted by age and maturity, the nature of the child’s relationship with each parent, the likely effect of changes to the child’s circumstances, the practical difficulty of proposed arrangements, the capacity of each parent to meet the child’s needs, and any family violence.
Family violence and parenting proceedings
Family violence — including coercive and controlling behaviour — is a significant consideration in parenting proceedings. Courts are required to give particular weight to protecting children from physical or psychological harm arising from family violence. Where serious allegations are made, the court may appoint an Independent Children’s Lawyer to represent the child’s interests independently of both parents.
The interaction between family violence orders under state law and parenting orders under the Family Law Act is technically complex. Both sets of orders can operate simultaneously, and apparent conflicts must be carefully managed.
9. The process
Before proceedings
Most family law matters — including those involving substantial assets — are resolved without litigation. The pre-proceedings process typically involves the exchange of financial disclosure, negotiation between lawyers, and, in some cases, the engagement of a mediator. For parenting matters, attendance at family dispute resolution is generally a prerequisite to filing in court.
In complex property matters, the pre-proceedings phase often involves engagement of forensic accountants and valuers to establish agreed or competing valuations of assets. The process of reaching agreed valuations — or narrowing the issues between competing valuations — can be among the most consequential steps in the entire matter.
Collaborative law
Collaborative law is a structured alternative dispute resolution process in which both parties and their lawyers commit, in writing, to resolving the matter without litigation. For clients who want a private, controlled, and dignified resolution process — and who are prepared to engage with it in good faith — collaborative law can produce excellent outcomes in complex matters. It is particularly well-suited to matters where the parties have ongoing business relationships or shared parenting responsibilities.
Court proceedings
Where matters cannot be resolved by agreement, proceedings in the FCFCOA follow a structured case management pathway. In complex property matters, that pathway typically includes a first court date, a financial case assessment conference, and directions toward a final hearing. Complex matters can take two to four years from filing to final hearing — one reason why early, well-structured negotiation supported by experienced legal advice is almost always preferable to litigation.
10. For professional advisers
Accountants, financial planners, corporate solicitors, and private wealth managers frequently encounter clients navigating family law matters. Several issues arise regularly in that context.
The duty of financial disclosure in family law proceedings extends to interests in trusts, companies, and investments that may be managed by the client’s advisers. Understanding the scope of that duty and its implications for records held by the adviser is important where a client is in proceedings.
CGT and stamp duty consequences arise from the transfer of assets in property settlement. Roll-over relief provisions under the Income Tax Assessment Act 1997 apply to transfers made pursuant to a court order or financial agreement under the Family Law Act — but the conditions for relief must be met, and the circumstances in which it is not available require careful analysis in structuring settlements.
Superannuation splitting orders interact with the rules governing SMSFs, defined benefit funds, and accumulation interests, requiring coordination between the family lawyer and the client’s financial adviser or accountant.
Binding Financial Agreements are increasingly relevant to estate planning, particularly for clients entering second relationships with children from prior relationships.
If you advise clients who may need specialist family law assistance, we welcome referrals and are happy to discuss a client’s circumstances confidentially before any formal instruction is given.
11. Areas of practice within family law
The Koffels family law practice covers the following areas, each addressed in depth through the hub pages below.
- Property settlement and business interests — Valuations, trust structures, shareholder agreements, and contested asset pools in complex property matters.
- Binding Financial Agreements — BFAs for parties entering significant relationships, business owners, and individuals with inherited or structured wealth.
- Cross-border and international family law — International child abduction, overseas property, relocation applications, and multi-jurisdictional proceedings.
- High-conflict parenting matters — Serious allegations, family violence, international relocation, and proceedings involving significant complexity.
- Law reform and process — The 2024 Family Law Amendment Act, the collaborative law process, and current court procedure.
- For professional advisers — Resources for accountants, financial planners, and corporate solicitors whose clients are navigating complex family law matters.
Speak with us in confidence
If you are facing a family law matter in which the interests at stake are significant, we invite you to contact us for a confidential discussion. There is no obligation, and what you tell us is privileged.
This guide is intended as a general reference only and does not constitute legal advice. Family law outcomes are highly fact-specific. You should seek advice from a qualified family law solicitor in relation to your particular circumstances. Koffels Solicitors and Barristers, Level 23 Angel Place, 123 Pitt Street, Sydney NSW 2000.
