By Tony Burke and Hamish Thomson
The breakdown of a marriage or de facto relationship inevitably creates the need for assets to be divided among the separating parties. If an agreement cannot be reached on how to divide the assets, it may be necessary to make an application to the Court for property/financial orders.
At O’Hearn Lawyers, our experienced family law team will provide you with concise advice to ensure you obtain your rightful entitlement during an otherwise stressful period.
How are my assets divided upon separation?
Contrary to popular belief, there is no presumption that assets should be divided 50/50, 60/40 or in any other predetermined proportion. Rather, factors contained in the Family Law Act provide the framework as to how property shall be divided.
The following factors are considered in determining how the net pool of assets is divided pursuant to the Family Law Act 1975:
- The current value of the assets and liabilities.
- The direct financial contributions made by each person to the acquisition of assets or the preservation, improvement or maintenance of those assets. This will include assets owned at the commencement of the relationship.
- The indirect financial contributions made by each person in the relationship, for example, the giving up of a career to allow the other person to further their own career. This may include gifts or valuable contributions towards the preservation, improvement or maintenance of the matrimonial assets e.g. if the wife’s father performs building work on the couples’ property for free, this may be considered an indirect contribution by the wife.
- The non-financial contributions by each person, like caring for children, being the homemaker and maintaining or improving the assets by personal exertion such as individual efforts in renovations that increase the value of an asset.
- Identifying the future needs of the parties, for example, age, health, financial resources, superannuation, care of children and income earning capacity.
What property can be divided by the Court?
If a property settlement is to be decided by the Court, the Court must identify and value the parties joint and individual property interests before it can make Orders altering respective property interests. This includes income, assets and superannuation.
The Court will assess the value of this property by way of a full and frank disclosure by the parties of the property interests via a Financial Statement.
A Financial Statement is a document which incorporates all of the assets and liabilities (joint or individual) for each party. As a document that will be addressed by the Court, it is essential to properly complete a Financial Statement for such proceedings. At O’Hearn Lawyers, we can assist you in the preparation of a Financial Statement, or any other necessary document required in proceedings.
Considerations of the Court
Both direct and indirect financial contributions made by each party to the acquisition of assets or the preservation, improvement or maintenance of those assets will be considered by the Court. Additionally, non-financial contributions to property and the welfare of the family constituted by the marriage or de facto relationship will be considered. This can include but is not limited to any homemaker or parenting contributions which has deducted from the party’s ability to make direct financial contributions to property. In doing so, the Court must attribute an appropriate weight to each contribution.
Assessing the Future Needs of Party
The Court does not only consider the past and present circumstances of each party, but it also assesses a party’s future needs. If capacity to provide for yourself or your family has been impacted by the relationship breakdown, then the Court may consider this in your ability to provide for your future needs.
Future needs of the parties, age, health, financial resources, superannuation, care of children and income earning capacity are all considered by the Court.
The Family Law Act 1975 allows the Court to divide superannuation interests, meaning you may be entitled to a share in your former partner’s superannuation. Superannuation splitting laws allows separating couples to value their super and transfer funds from one fund to another depending on the determined split. This however does not mean that the superannuation funds can be accessed earlier than otherwise permitted by legislation – the transferred funds remain subject to superannuation rules and regulations.
On the whole
After considering the above factors the Court will consider what is ‘just and equitable’ in the circumstances.
It is important to note that the Court will always prefer for parties to settle their matter instead of requiring the Court to make Orders. Accordingly, early settlement by the parties is encouraged and O’Hearn Lawyers can assist in negotiating and/or mediating towards a timely settled outcome.
A final note – strict time limits apply to many aspects associated with Court related property settlements and O’Hearn Lawyers can ensure you are aware of all timing requirements.
If you have separated and require property settlement advice, we are able to help.
Our experienced and friendly family law team can be contacted on 4951 8199 or click the link below to get in touch.
The material included in this website is produced by O’Hearn Lawyers Pty Limited. It is designed and intended for general information purposes only. The contents do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. You should seek legal advice or other professional advice in relation to any particular matters you or your organisation may have.