Disposing of Assets Before a Property Settlement

Maybe you are thinking about selling something before the property side of your separation is sorted, a car, some shares, a second property, and you want to know if you are allowed to. Or maybe you have just noticed your ex moving money, transferring things into someone else’s name, or putting a house up for sale, and you want to know if you can stop it.

Here is the plain answer, and it works for both of you. Yes, you can deal with assets you own before a settlement is finalised. What you cannot do is deal with them to shrink or defeat what your ex can claim. If a sale, gift or transfer is set up to put an asset beyond your ex’s reach, the court can undo it, add the value back, or take it into account when it splits the property pool. This page covers both sides: what you are allowed to do, and what to do if it is your ex doing the moving.

Disposing of assets before property settlement: the you-likely-can / you-cannot test

Before anyone talks process, this is the line most people actually want drawn. Here is the test.

You likely can if:

• It is genuinely your own asset, not jointly owned. A solely owned asset you can deal with, though it still counts in the pool. A jointly owned asset needs both owners to agree or a court order.
• The dealing is at arm’s length and at market value, a real sale to a real buyer at a fair price.
• The proceeds are accounted for and still traceable in the pool, not spent or hidden.
• You disclose it.

You cannot if:

• It is done to put the asset beyond your ex’s reach.
• It is a below-value or sham transfer, for example into a parent’s or a friend’s name.
• The money disappears, or you hide it.

That last one catches a lot of people. The idea of parking a house in your parents’ names to keep it out of the settlement sounds clever, but here is what it actually does.

What’s actually going to happen is you’re going to complicate your family law proceedings. You’re going to involve your parents in the court proceedings. They’re going to be parties to these proceedings, they’re going to be dragged into it, they’re going to have to get lawyers, they’re going to pay legal fees, and everything is going to get a lot worse for everyone. So do I advise you to put assets in the name of your parents? No.

One more thing to be clear on, because it changed recently. The duty of full and frank disclosure now sits inside the Family Law Act 1975 (Cth) s 71B for married couples, and s 90RI for de facto couples, from 10 June 2025. It used to live in the old court rules. In plain terms, you have a legal obligation to lay out your finances honestly, and that includes assets you have recently sold, transferred or gifted. The Federal Circuit and Family Court of Australia sets out how that duty of disclosure works.

What the court can do if assets are disposed of to reduce the pool

Say a dealing crosses the line. It was not a genuine sale, it was a move to keep the asset away from the other side. The court has real teeth here, and it uses them.

1. Claw the asset back. The court can set the transaction aside and pull the asset back into the pool where a dealing was made, or is likely, to defeat a claim (Family Law Act 1975 (Cth) s 106B). A “disposition” covers a sale, a gift or a transfer, so dressing it up as a present does not put it out of reach.
2. Consider deliberate depletion. While the former add-backs approach no longer applies, the court can still take deliberate or reckless depletion of the asset pool into account when determining a fair property settlement.
3. Treat wastage as a factor. Where someone intentionally or recklessly wasted assets, the court can weigh that in the split under the amended Family Law Act 1975 (Cth) s 79 (s 90SM for de facto), a change that commenced 10 June 2025.

A transaction designed to defeat the other party’s claim can be set aside or considered holistically. And it is not just sales the court looks at. Manufactured debt gets the same scrutiny.

Artificial liabilities taken on during separation, or around the time of separation, to try and diminish the value of a trust, such as mysterious new related party loans or last-minute consulting invoices, this will all invite scrutiny from the court.

A legitimate sale still counts in your settlement

A genuine sale is not a problem in itself. But do not assume that selling something turns it into cash that walks out of the settlement with you. The proceeds are still part of the pool, and unexplained spending can be treated as deliberate depletion or wastage when the court works out a fair split.

This is where the timing matters, and where people get caught out.

The court looks at the current asset pool at the time of the hearing, not at separation.

So the value in play is what exists now, not a snapshot from the day you split. If you sold something at a fair price and the money is sitting in an account you have disclosed, that is fine. If it evaporated, you will likely be asked where it went.

What to do if you suspect your ex is disposing of assets

Now the other side of it. You think your ex is selling, transferring or draining assets before the split is sorted. The earlier you move, the more options you have, so do not sit on it. Here is the order to work through it.

1. Get urgent advice and put your ex on notice in writing. A clear written record that you object to any dealing matters later.
2. Ask the court to stop it. You can apply for an injunction or freezing order to stop further dealings (Family Law Act 1975 (Cth) s 114; s 114(2A) for de facto couples).
3. Consider a caveat over real property, carefully. A caveat can freeze dealings on a property title, but only where you have a genuine caveatable interest (Real Property Act 1900 (NSW) s 74F). A family law claim on its own may not be enough, and this is where a word of caution is needed.
4. Trace what has moved. Build a timeline of the transactions and use the disclosure obligation, subpoenas and valuations to follow the money.

On that caveat point, I want to be straight with you, because me and my team have seen it go both ways. Lodge the right caveat and you can stop a sale in its tracks. Lodge the wrong one and it can cost you.

If you do lodge a caveat and it results in a sale falling through because of that caveat, and it is then found out that that caveat should not have been put on and you didn’t have legal grounds to put that caveat on, then you could end up with a cost order. You could be paying damages as a result of the loss of the sale.

That is not a reason to do nothing. It is a reason to get advice before you act, so the step you take actually protects you instead of backfiring.

Where to from here

If you are weighing up a sale, keep it genuine, keep the proceeds traceable, and disclose it. If you think your ex is the one moving things, act early. Delay makes assets harder to trace and harder to claw back, and the court is working off what exists at the hearing, not what you remember from separation.

If you are selling and worried about the tax side, that is a separate question worth reading up on. Start with our guide on Capital Gains Tax and family law.

This is the kind of situation where a short conversation early can save you a lot later. Book a free discovery call and me and my team will walk you through where you stand and the next step, whether you are the one selling or the one trying to stop it. Talk to our property settlement lawyers or our family court team on 1300 614 732.