Hi there. The Family Law Act 1975 (Cth) (FLA) deals with the separation of assets on a divorce and provides some basic guidance. However, the division of property after a divorce is extremely complicated with many variables, as you have discovered (the inheritance).

Parties to a divorce may apply to the Court in a property settlement proceeding for an order about how property will be divided. In this case the Court will make an order which it considers to be fair based on the circumstances of each case. There is no single approach to the division of assets made by the Court, and generally speaking assets are not simply split “50/50”. Instead, the Court considers the contribution made by one each party to the joint assets. This will include such things as actual contribution of capital (for example if one party works full time) but also non cash contributions, like child rearing. In your case, the Court will also consider the contribution of the large sum of inherited money toward the joint assets. However, it is not possible to say how the court is likely to consider the contribution without detailed information about it.

Alternatively, the FLA provides for the possibility of parties to a divorce making their own binding financial agreement. This can deal with the splitting of assets, and other financial issues like spousal maintenance in whatever way the parties choose. These agreements can be made binding if signed by both parties and if both parties have received independent legal advice to ensure each is being treated fairly and/or know their rights.