The primary task that family law courts need to do when assessing how the assets of a marriage or de facto relationship should be divided is to assess each party’s contributions to those assets.

There are two approaches that can be used by the court for this purpose. Those two approaches are generally known as the ‘global approach’ or the ‘asset-by-asset’ approach.

As its name suggests, when a global approach is used, the parties’ assets are considered in one big ‘global’ group (or pool) and the division is based on the parties’ contributions to the overall pool of assets.

In the majority of property settlement cases, this global approach will be used.

An example of such an approach being used might be where parties have been married for 20 years, with the wife being a stay-at-home parent and the husband providing for the family during the relationship. Their assets, consisting say of a modest fully-paid family home, a car and some funds in a bank account, would be pooled together and the division of matrimonial assets considered on an overall basis.

When a relationship is of short duration however, say less than 5-7 years, a global approach may not be appropriate nor the easiest way to assess the parties’ true contributions, in which case the second ‘asset-by-asset’ approach is more frequently used.

That is, each party’s respective contributions and interest in each individual asset is considered.

An example of such a situation might be where parties have been married for only 2 years, with the wife having entered the relationship with a fully paid home and the husband having entered the relationship with only a car. In that case, it would be more appropriate to assess each individual asset and each party’s entitlement to such assets.

An asset-by-asset approach might also be used where parties’ have separated and proceedings are issued many years later when the parties have started to move on with their own finances.

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