When a marriage or de facto relationship breaks down, the separating parties will need to not only deal with the emotional fallout, but also consider how their property is to be divided and their financial ties separated.
There is no automatic 50-50 division of assets from the relationship.
Instead, property division or property settlement as it is known, is determined on each party’s contribution towards the acquisition of the assets and the care of the family. Also considered are the future needs of the parties.
Generally, the Family Court adopts a 4-step approach towards property division:
What are the assets of the parties? This would include:
What liabilities need to be paid out?
Similarly, this would include liabilities in the sole or joint names of the parties as well as liabilities of the businesses, trust and companies controlled by both or one of the parties.
Such as:
In assessing the financial contributions, the following are to be considered:
Property and cash brought by each party into the relationship at the commencement of the relationship.
Payments made by each party during the relationship and after separation by way of:
In assessing the non-financial contributions, the following are to be considered
After assessing the financial and non-financial contributions made by each party, the entitlement of each party to the property division is determined. This is expressed as a percentage.
For example, in a short relationship where one party brought most of the assets into the relationship, it may well be that this party is entitled to 55% or more of the property division.
On the other hand, property division may be 50% each in a long relationship, where parties entered the relationship when they were young and built up the assets during the relationship with one party working and the other caring for the home and children.
Consider whether the division determined after Step 2 above should be adjusted after considering the current and future circumstances of the parties, including: –
For example, one of the parties in a long relationship may have substantially greater earning power due to his or her qualifications while the other party had been a full-time homemaker during the relationship caring for the household and children.
In this case, there may be an adjustment of say 5% to 20% in favour of the party with the lower earning capacity, depending on the circumstances of the case.
“Just and equitable” means what is fair in all the circumstances of the case.
The Family Court has a broad discretion in considering whether the property division determined in Steps 2 and 3 above is “just and equitable”.
The Family Court considers not only the percentage of the property division but also the practical effect on the parties of the property division order made.
Importance of Seeking Legal Advice Before Proceeding with Property Division
While some property division can be reasonably straightforward, others can be extremely complex. It is important that you receive accurate and timely legal advice about your rights and the time frames imposed under family law to commence property division in the Family Court.
At Robertson Hayles Lawyers, our family law solicitors provide advice about your entitlements. We advise on a range of options to achieve a settlement including negotiated settlements, mediation and where agreement is unable to be reached, commencement of Family Court proceedings.
Our family law solicitors will also provide you with advice about matters arising from your proposed property division including taxation and stamp duty implications and other issues which when overlooked may have serious financial consequences.
Our family law solicitors have acted in all types of family situations including where the only asset is the family home to complex and substantial property settlements.
We also advise on disputes involving businesses, company structures, self-managed superannuation funds and business loan facilities.
Our family lawyers are experienced in commercial law which provides them with the requisite knowledge to effectively manage property division involving complex company and trust structures and other commercial arrangements.
If parties can reach an agreement on property division, parties can proceed to obtain Consent Orders through the Family Court.
In some cases, the parties prefer to enter into a Binding Financial Agreement to record the terms of the property division rather than seek a court order.
A Binding Financial Agreement is a private arrangement and is not lodged in the Family Court. Our family law solicitors will provide advice regarding the most appropriate option for you.
If an agreement is not reached, our family law solicitors will provide you with advice about the Pre-Action Procedures that are required to be taken before commencing property division proceedings in the Family Court.
Our family law solicitors will prepare the required financial and court documents to progress the matter through the Family Court.
We will appear on your behalf in court hearings and offer you access to Family Law Barristers if the matter should proceed through to a trial.
For all enquiries please contact Robertson Hayles Lawyers on (08) 9325 1700 by email at enquiries@robertsonhayles.com or via our contact form and we will be happy to assist you.