What’s in and what’s out ? Constructing a schedule of assets and liabilities for your property settlement

Published by Naomi Lewis

When you are faced with the breakdown of a marriage or de facto relationship, one of the most significant legal challenges that you will have to tackle is the division of assets. You and your former partner will need to bed down what your respective financial situations are going to look like post-separation and, in simple terms, work out who is going to keep what.

This process can be extremely anxiety provoking, particularly if you haven’t had much to do with the management of your finances during your relationship.

It is prudent to receive legal advice as to the general legal framework for a property settlement relatively early on in the process. This doesn’t mean you need to engage a lawyer straight away to commence negotiating with your former partner, but a one hour information session to assist you in “getting your ducks in a row” and working out an “action plan” can keep some of the anxiety at bay and set you up for greater success as your property settlement progresses.

The first step in getting those ducks in a row is to work out “what’s in and what’s out?”. That is, before you can start bedding down how the assets and liabilities will be divided, you need to work out what the assets and liabilities actually are.

This is considered to be one of the initial steps in a “five-step process” for property settlement. (Click here for our article on the five-step process).

The easiest way to take stock of “what’s in and what’s out” is to create a table. We refer to this as the “schedule of assets and liabilities”. The most important information to include is a description of the asset, whose name it is in (who technically owns it) and an estimated value. You might also like to make some notes such as when was it purchased and for how much.

FIRST, consider what assets each of you own. Assets that are in your sole name, your former partner’s sole name and assets in joint names all form part of the schedule. Assets to include are:

I. The matrimonial home (if you are homeowners)

II. Any investment properties

III. Cars, bikes, boats, camper vans, trailers

IV. Funds held in bank accounts

V. Share portfolios

VI. Interests in any business, trust or company

VII. Household contents

SECOND, identify what superannuation interests you and your former partner have. These must also be included in the schedule. There are different types of superannuation funds (eg. defined benefit funds, accumulation funds and self-managed super funds), and the process for determining the value of each different type of fund can vary. 

THIRD, identify what liabilities (debts) you and your former partner have in your individual names and in joint names. Liabilities to include are:

I. Mortgages/home loans

II. Personal loans

III. Business loans

IV. Car leases

V. Credit cards

VI. Known or expected tax liabilities

A few things to remember as you are go through this process:

I. It’s ok to have “gaps” – when you first fill out your schedule there will likely be items that you don’t know the value of, or there will be items that should be included that you don’t even know exist. That is ok, and very common. Your former partner will have to go through this process as well and eventually you will each be required to disclose your respective financial positions. It is during this disclosure process that the “gaps” can be filled.

II. Bedding down a value isn’t always straightforward – it may be the case that you and your former partner can’t agree on what certain items are valued at. Usually, the values that are most contentious relate to real estate and interests in trusts and companies. Luckily, there are expert valuers who you and your former partner can engage to avoid a protracted dispute about values. An important principle to remember is that the value of an item in your schedule is today’s value, not the value at the date of separation or the value at the date of purchase.

III. Furniture and household contents are not worth what you think – when you go to include your furniture and household contents in your schedule, you might be surprised to know that these items cannot be included as their replacement cost or insured value. The appropriate value for furniture and household contents is their second-hand value. Often parties decide not to include furniture and household contents in their schedule, and simply agree on how the specific items will be divided between their new places of residence.

IV. Don’t try to pull the wool over anyone’s eyes – when you go through a property settlement there is a very important obligation on both parties known as “full and frank disclosure”. You both need to be upfront as to your respective financial positions. Don’t try to “hide assets”.

So to answer the question that we posed upfront – what’s in and what’s out?… Basically, everything is in. Anything that you and your partner own that has a monetary value right now is to be included in the schedule.

Once you have completed this first step, you can start turning your mind to how you and your former partner created the wealth that has been so succinctly summarised in your schedule of assets and liabilities. And, in turn, determine who needs and wants what moving forward.


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