How does the law work without a BFA?

The Court will either take a ‘Global approach’ or an ‘Asset by Asset’ approach.

1. Global approach

4 stage process

1. Should an order be made at all?
2. determine the balance sheet / asset pool (as at current date)
3. assess contributions of the parties (as a percentage)
4. Adjustment for section 75(2) factors / future financial needs.

Note: Everything goes into the joint asset pool – regardless of whose name it is in and regardless of where the asset came from.

2. Asset by Asset approach

This approach is rare, and usually only used when both parties agree or if the de facto relationship was very short, with no children and no inter-mingling of finances. Rarely used in marriages.

1. Prepare balance sheet identifying all assets and who owns each asset;
2. Identify which items on the Balance sheet need to be "pooled" as joint and which ones can be quarantined from the settlement.
3. Apply percentage to each individual asset (some may be 100% / 0%)

For example a couple may decide that their Superannuation should be excluded from the settlement and instead each party shall retain their superannuation and the balance of the assets are divided.