Who Gets What? Common Misconceptions
There are no universal rules for dividing assets after separation. In Australia the family law system is discretionary meaning despite what you may have read or heard it is not as simple as dividing property and financial assets 50/50.
Property settlements aim to reflect what is fair for both parties. Reaching an agreement without the help of a family lawyer is difficult and emotionally charged for even the most amicable couples.
How property settlements are worked out
Knowing how the courts determine a fair settlement will help you prepare for the process ahead. Although both parties may not have the same perspective on what is ‘fair’, there are generally four steps your family lawyer will work through:
- The value of all property of both parties
Regardless of whose name they are in or when they are were acquired, all assets and liabilities should be considered in the shared pool. This includes savings, real estate, home loans, cars, credit cards, businesses, business loans, superannuation, companies and trusts. It also includes property and financial interests shared with a third party.
- Contributions from both parties to the relationship
The definition of contributions is broader than just financial. The court will look at homemaker and parenting contribution, and other non-financial contributions. For example, if you or your ex-partner took time off work to raise a child, the court takes this contribution to the family very seriously.
- Needs of the parties (current and future)
Commonly the needs question takes account of each party’s age, ability to earn, health, and responsibilities caring for children. This element can be complicated because it should consider future inheritances and support, financial or otherwise, which can be hard to quantify.
- Determine a just and equitable split
The final step is to take a step back and consider what the proposed settlement actually means for each party in dollar terms, and determine whether it is fair for both of them. Although it seems straightforward there are the perspectives of both parties to consider. Separation is tough enough without ongoing stress and arguments if one party feels like they are being short changed.
Leach Legal can help; book a free 15-minute consultation with one of our experienced family lawyers to ensure you receive a fair division of property and financial assets.