When couples separate, dividing property can get tricky. One issue that often comes up is whether to add back money or property that no longer exists. This happens when one person uses shared relationship money on things like legal fees or personal expenses before the property split is final.
These are called family law property settlement add backs.
So what does this mean? Family law property settlement add backs are when someone asks the court to treat money that has already been spent as if it were still there, so the division of property feels fairer.
But after recent changes to the law, courts now look at add backs differently. They no longer count as part of the property pool, but they may still matter in other ways.
Let's break it down further with some common questions.
What Are Add Backs In A Family Law Property Settlement?
In a family law property settlement, courts used to include things like spent money, wasted assets, or early withdrawals as add backs. This meant that if one person used up joint funds before the court divided everything, the court could still treat that money as if it were part of the property pool.
For example, if a couple sold their home and one person used most of the money to pay for their own lawyers or personal expenses, the other person might ask for those funds to be added back into the property pool to make the split more balanced.
Family law property settlement add backs were used to help stop one person from getting more than their fair share by spending joint money before the case was finished.
Are Add Backs Still Allowed Under The 2025 Family Law Amendments?
No, not in the same way as before. Recent changes to the Family Law Act mean that courts can only divide existing property. That means only property and money that still exists at the time of the court hearing can be part of the official property pool.
So, under these new rules, family law property settlement add backs are not included as assets. Courts cannot treat money that has already been spent as if it were still there.
This does not mean that the way someone used that money no longer matters. It just means that it is not counted in the list of property to divide. Instead, the court may look at how that money was spent and use that information in a different way when making its final decision.
Read also: Can You Get Divorced Without a Property Settlement?
How Do Courts Now Treat Spent Or Dissipated Assets In Property Settlements?
Even though add backs are no longer part of the official balance sheet, they are still important. Courts now consider the use of spent or wasted assets in two ways:
- Contributions: If one person used relationship money to pay for something that helped both parties, like household bills or children's needs, the court might count that as a positive contribution. But if the money was used for personal gain, like gambling or unnecessary spending, the court might see that differently.
- Future Needs: If one person ends up in a worse financial position because the other spent most of the money, the court can adjust the final outcome to account for that. This means the person who still has fewer resources might receive more of the remaining property.
So while family law property settlement add backs no longer appear on the property list, the court still looks closely at how and why that property is no longer there.
Read also: What Factors Do Property Settlement Lawyers Sydney Consider When Dividing Assets?
Can Legal Fees And Wasted Funds Be Considered In Property Division?
Yes, but not by adding them back into the asset pool. Legal fees and other wasted funds can be looked at as part of each party's behaviour and circumstances.
For example, if one person spent a lot of relationship money on their own lawyers, the court might think about whether that was fair or if it left the other person with less. Courts might also look at whether someone gave away property or sold it cheaply just to keep it away from their former partner.
Even though the court cannot include those amounts in the official pool, these actions can still change how the final split is done. This is a big part of why family law property settlement add backs are now dealt with under rules about contributions and future financial needs.
What Should I Do If My Former Partner Has Spent Or Hidden Relationship Assets?
If you think your former partner has used or hidden joint property before your case is finalised, there are still steps you can take. While courts will not include those assets as add backs in the balance sheet, they will look at the behaviour behind it.
Make sure to collect evidence of how the property was used. Bank statements, receipts, or emails can help show the court what happened. The court can use this information to adjust how it divides what is left.
In these cases, lawyers will not argue for family law property settlement add backs the old way. Instead, they will focus on how the spent or missing property affected contributions or current needs. This can still lead to a more fair outcome.
Why Add Backs Are Handled Differently Now
The way courts handle family law property settlement add backs has changed. They are no longer part of the balance sheet. Only property that still exists counts when dividing things between separating partners.
However, this does not mean add backs are forgotten. They still matter, just in a different way. Courts now look at how money was used, and whether that use was fair or unfair. This shift helps focus on real situations instead of counting pretend assets.
If you are dealing with a property settlement, it is important to understand how courts view the use of money and property that no longer exists. These details can affect how much you get in the end.
Need Help Sorting Out Your Property Division?
Do you feel like your former partner spent money that should have been shared? Are you unsure how courts will deal with lost or wasted property? Justice Family Lawyers can help. Our team has deep experience with family law property settlement add backs and understands the new legal approach.
We work with care and attention to make sure your situation is properly understood by the court. Book a consultation with us today to talk through your options and get expert guidance on your next steps.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
