The End of Add Backs in Family Law: What This Means for Your Property Settlement Case

Key Update: Australian family law no longer allows "add backs" of spent or sold assets in property settlements. The Shinohara & Shinohara (No 2) [2025] ruling confirms courts can only divide existing property under amended Family Law Act 1975 provisions.

If you’re going through a property settlement after separation, you might want to pay close attention — because a major shift in Australian family law has just changed the way property pools are calculated. The long-standing rule around “add backs” has been overturned, and that could significantly impact the outcome of your case.

What Are ‘Add Backs’ and Why Were They So Important?

For years, “add backs” allowed the court to treat certain property or money — even if it no longer existed — as part of the asset pool for division. The idea was simple: if one party had spent or disposed of assets unfairly, the court could notionally “add back” that value to ensure fairness.

The Shinohara Case: What Happened?

In Shinohara & Shinohara, both the husband and wife had sold several properties, including units in different suburbs and their former family home. The funds from those sales were largely used to pay legal costs and other personal expenses. Early in their case, they even agreed to “add back” about $592,000 to their asset pool.

How the New Law Interprets Add Backs

The Court based its decision on section 79 of the Family Law Act 1975, which, after the June 2025 update, now states that only “existing legal and equitable rights and interests” can form part of the property pool at trial.

Why This Change Matters for Property Settlements

At first glance, this shift may seem technical — but it has very real consequences for separating couples. If your ex-partner has spent or sold assets before trial, that value will no longer be counted in the divisible pool. That means the pool could look much smaller, leaving less to divide between you.

How This Affects Property Disputes Across Australia

The Shinohara decision marks the end of the “notional property” era in Australian family law. It fundamentally changes how property settlements are argued and calculated.

A Closer Look at Legal Strategy Moving Forward

So, where does this leave you? The main challenge now lies in presenting a comprehensive narrative that reflects your contributions and needs in light of how assets were used.

Final Thoughts: Navigating the New Rules with Confidence

The end of add backs doesn’t mean you’re powerless to challenge unfair financial conduct — it simply means the rules of the game have changed. Courts will still consider how assets were used, but they’ll now do it through the lens of contributions and needs rather than notional accounting.