When you separate, dividing your finances can become more complicated than simply working out who keeps the family home. If you and your former partner have built an investment portfolio, own shares, hold cryptocurrency or have investment properties, there are additional considerations that may affect your property settlement.
Investments in a property settlement are generally considered as part of the broader pool of assets and liabilities when determining how property should be divided after separation. However, how they are valued, who retains them and how they affect the overall settlement will depend on your individual circumstances.
The important thing to understand is that investments are not automatically divided equally, nor does the person whose name appears on an investment account necessarily get to keep everything in it.
If your financial circumstances are more complex, getting the right advice early can help you understand your position, protect your financial interests and make informed decisions about your next chapter.
1. What investments are included in a property settlement?
In Australian family law, a property settlement involves identifying and valuing the assets, liabilities and financial resources relevant to both parties.
This can include investments acquired before, during or after the relationship, depending on the circumstances.
Some common examples include:
Shares and exchange-traded funds (ETFs): Investments held through online trading platforms, brokerage accounts or share portfolios.
Managed funds: Investments held through financial institutions or investment managers.
Investment properties: Residential or commercial properties owned individually or jointly, including properties located overseas.
Cryptocurrency: Digital assets such as Bitcoin and Ethereum.
Business interests: Shares in companies, partnerships or interests in businesses.
Family trusts: Interests in trusts, including circumstances where one or both parties have control or access to financial benefits.
Other financial investments: Term deposits, bonds and other investment products.
It is important to remember that the legal ownership of an asset is not necessarily the only consideration.
For example, an investment portfolio might be held solely in your name, but that does not automatically mean it will be excluded from the property settlement.
The broader financial circumstances of both parties need to be considered. Learn more about protecting assets during separation.
2. Does it matter who purchased the investments?
One of the most common questions separating couples have is whether investments purchased in their own name will remain theirs after separation.
The short answer is that ownership is relevant, but it is not necessarily decisive.
When determining a property settlement, the Court considers the overall financial position of both parties, including their respective contributions to the relationship and their current and future circumstances.
For example, consider a couple who have been together for 15 years. One partner has managed the household and cared for their children, while the other has focused on their career and built a substantial share portfolio.
Even if the investment account is held solely in one person's name, the other partner's contributions to the relationship and family may still be relevant when determining the property settlement.
Similarly, investments purchased before the relationship may be considered as part of the overall property pool. The fact that an asset was acquired before the relationship does not automatically exclude it from consideration.
This is why it is important to look at the bigger picture rather than assuming that an asset belongs exclusively to the person whose name appears on the paperwork.
3. How are investments valued during a property settlement?
Before you can work out how investments should be divided, you need to understand what they are worth.
Some investments are relatively straightforward to value. Others may require additional financial information or independent professional advice.
For example:
Shares and ETFs
The value of listed shares and ETFs can generally be established using current market prices and brokerage statements. However, the value of an investment portfolio can fluctuate, so it is important to understand which valuation date is being used when negotiating a settlement.
Investment properties
Investment properties may require an independent property valuation, particularly if you and your former partner disagree about their market value.
You will also need to consider any outstanding mortgage, associated liabilities and other relevant financial information.
Cryptocurrency
Cryptocurrency can be more difficult to assess because its value can change significantly over short periods. You may also need to establish the extent of the holdings, which platforms are being used and whether any assets are held in digital wallets.
Business and trust interests
Where investments are held through companies, partnerships or trusts, the underlying structure may need to be examined. This can involve reviewing financial statements, ownership arrangements, trust deeds and the extent of each person's control or financial interest.
In more complicated matters, an independent accountant, financial expert or qualified valuer may be required to help establish the value of particular assets.
The goal is to ensure that both parties are negotiating with an accurate understanding of the financial position.
4. What happens to investment income and growth after separation?
Another important consideration is what happens to investments after you separate.
For example, you may have a share portfolio that continues generating dividends, an investment property that produces rental income or a portfolio that increases in value while your property settlement is being negotiated.
These changes can raise questions about how the assets should be treated and whether any income or growth needs to be accounted for.
The timing of the investment activity, the source of any additional funds and the contributions made by each party may all be relevant.
It is also worth remembering that separation does not automatically finalise your financial relationship with your former partner.
Until a property settlement has been properly resolved, there may still be financial matters that need to be considered, including investment income, ongoing expenses and changes in asset values.
If you are unsure about making changes to an investment portfolio, selling assets or withdrawing funds, it is sensible to obtain legal advice before taking action.
5. What about tax implications when dividing investments?
Tax is another important consideration when investments form part of a property settlement.
An agreement that looks financially fair on paper may have a different outcome once you account for the potential tax consequences.
For example, selling shares or an investment property may trigger capital gains tax (CGT). This is a tax that can apply to the profit made when certain assets are sold or otherwise disposed of.
Transferring investments between former partners can also have tax implications, depending on the asset and how the settlement is structured.
There are specific rollover provisions under Australian tax law that may apply to certain transfers made under qualifying relationship breakdown arrangements. However, these provisions do not mean that every transfer is automatically tax-free.
Other considerations may include:
Capital gains tax associated with selling investments.
Potential tax consequences of transferring shares or other assets.
Rental income and expenses associated with investment properties.
Outstanding investment loans and other liabilities.
The future tax position of the person retaining an investment.
This is where it can be helpful to involve an accountant or financial adviser alongside your family lawyer.
Your lawyer can help you understand the legal implications of different settlement options, while a tax professional can advise on the financial consequences.
The aim is to make sure you understand what you are actually receiving, not just the headline value of an asset.
6. How do you divide investments in a property settlement?
There is no single formula for dividing investments after separation. The right approach will depend on the overall property pool, each person's contributions and their relevant future circumstances.
In many cases, it is possible to reach an agreement without having to sell every investment or divide each individual asset.
For example, one person may retain the investment property while the other receives a greater share of the cash assets or investment portfolio.
The important thing is that the overall arrangement is properly considered and documented.
The process generally involves:
Step 1. Identify all investments and financial interests
Start by creating a complete list of your investments, including shares, ETFs, managed funds, investment properties, cryptocurrency and any interests held through companies or trusts.
Step 2. Exchange financial disclosure
Both parties need to provide relevant financial information and supporting documents. This allows everyone involved to understand the full financial position.
Step 3. Establish the value of the investments
Obtain current statements, valuations and any additional information required to establish the value of each investment.
Step 4. Consider the overall property settlement
Your lawyer can help assess how the investments fit into the broader property pool, taking into account contributions and relevant future circumstances.
Step 5. Negotiate and formalise an agreement
Once the financial position is clear, you can explore settlement options through negotiation or mediation. Any agreement should then be properly formalised, which may involve Consent Orders or a Binding Financial Agreement, depending on your circumstances.
If you would like to understand more about the process, read our guide to how property settlements work and whether assets are always divided 50/50.
What can go wrong when investments are involved in a separation?
Investment-related property settlements can become complicated when important financial details are overlooked.
Some common issues include:
Failing to disclose all investments
Both parties have a legal duty to provide full and frank financial disclosure. This includes relevant financial interests held directly or indirectly, including through companies and trusts.
Leaving investments out of financial disclosure, deliberately or otherwise, can create serious complications.
Agreeing to values without proper evidence
Accepting an outdated share portfolio statement or an informal estimate of an investment property's value can lead to an inaccurate understanding of the overall property pool.
Making financial decisions too early
Selling investments, transferring assets or withdrawing funds without understanding the potential legal and financial consequences can create additional problems.
Overlooking tax consequences
Two assets with the same market value may not have the same financial value once potential tax liabilities and transaction costs are considered.
Reaching an informal agreement
Even when both parties agree on how their investments should be divided, it is important to ensure the agreement is properly documented and legally binding where appropriate.
A little preparation and the right professional advice can make a significant difference to the outcome.
Frequently Asked Questions
Are shares included in a property settlement in Australia?
Yes. Shares, ETFs and other investment holdings can be included in the property pool considered during a property settlement. Their value and how they are treated will depend on the circumstances of the relationship and the overall financial position of both parties.
Can my ex-partner claim investments held in my name?
Potentially, yes. Investments held in one person's name are not automatically excluded from a property settlement. The Court considers the overall property pool, contributions and relevant future circumstances when determining an outcome.
Do investments purchased before marriage count in a property settlement?
They can. Investments acquired before a relationship or marriage may still be considered as part of the overall property settlement. However, when and how they were acquired, their value and the contributions made by each party may be relevant.
What happens to cryptocurrency during a divorce?
Cryptocurrency can be included in a property settlement. Both parties may need to disclose their holdings, establish the value of the assets and provide relevant information about the platforms or digital wallets where they are held.
Do we have to sell our investment property when we separate?
No. Selling an investment property is not always necessary. Depending on the circumstances, one person may retain the property while the overall settlement is adjusted to account for its value.
Do I need a financial adviser as well as a family lawyer?
It can be helpful, particularly where you have a substantial investment portfolio, business interests, trusts or multiple investment properties. Your family lawyer can advise on the legal aspects of the settlement, while a financial adviser or accountant can help you understand the financial and tax implications of different options.
Get clarity on your financial future
When investments form part of a separation, it is important to understand the full financial picture before making decisions about what happens next.
Whether you have a share portfolio, investment properties, cryptocurrency or more complex financial arrangements, the right legal advice can help you understand your options and approach your property settlement with confidence.
At Martens Legal, we help individuals navigate property settlements with clear, strategic advice and a focus on achieving practical outcomes without unnecessary conflict.
You do not have to have everything figured out before speaking with us. We can help you understand where you stand and what your next steps should be.
Explore our family law services or contact Martens Legal to discuss your circumstances.
Disclaimer: This article provides general information about Australian family law and is not intended to be relied upon as legal or financial advice. Every property settlement is different. You should obtain independent legal and financial advice specific to your circumstances before making decisions about your investments or property settlement.