As Perth Family Divorce Lawyers we are here to help guide you through this difficult situation.
People often believe that the assets accumulated during a relationship, especially in consideration of a long relationship, are divided equally.
However, is this true? Here are a number of factors that could play a part in deciding what entitlements each party receives.
Although the idea of splitting things 50/50 is a common one, it is often not the fairest outcome.
Many couples who are separating make the mistake of thinking that they need to keep everything “fair” with an equal division of their nett assets. However, often one party will require additional assets in consideration of their disadvantaged financial position.
As Perth family divorce lawyers, we understand that divorce can be emotionally draining and difficult. In a moment when everything seems to be falling apart, it can be hard to stay calm, reasonable, and plan effectively for your future. While it can be tempting for finances to become a mess, it is important to know what your rights are and not to make agreements with the other party until you receive legal advice in relation to your entitlements.
How the Court will Decide What I Am entitled To in a Divorce in Australia
There are four steps to any property settlement for divorce:
Step 1: Identifying and valuing all parties’ property
Step 2 Assessing each party’s financial and non-financial contributions
Step 3- Identifying each party’s future needs.
Step 4 Ensuring that the division of property is “just” and “equitable” to the court.
The Shared Property Pool
This topic deserves its own article. However, in a nutshell, all assets and liabilities you and your ex-partner share should be included in your shared property pool. It doesn’t matter if they were acquired before or after you separated. This covers things such as
superannuation and interests in trusts and companies, as well as assets and liabilities that are shared with third parties. Each party must fully disclose bank balances and the value of any owned property or shares. It also needs to disclose debts owing on loans or interest in a company.
The Family Court can make Orders in relation to property or other assets in the other party’s name and parties need not be concerned if the assets of the relationship are not in their own name.
Introduction to the Court Process
Steps 2 through 3 will play the largest role in determining what rights I have in divorce in Australia. Step 4 may also be a factor.
There are no fixed values or entitlements for each party’s contribution. Instead, the court performs a subjective balancing act. This is done to determine the contribution’s weight in accordance with the legal standard for what is “just” and “equitable.”
Step 2 Assessing the Financial and Non-Financial Contributions to Each Party
This involves identifying the financial and non-monetary contributions of each spouse to the marriage or home and assigning weight to each item.
Types of Financial Contributions:
- Payment of the mortgage and bills and living expenses;
- Income from employment/shares/inheritance;
- You may have assets that you brought into the relationship.
Be aware that the rights to the assets that you brought into the relationship will dissipate over the length of a long relationship.
The longer a relationship, the more the property pool and contributions are considered equal. However, it is not unusual for there to be an adjustment to one party in addition to the equal contributions of the parties which often results in one party receiving additional property and or a cash adjustment.
Types of non-financial contributions:
Contributions to a relationship are not confirmed by financial contributions. A person’s contributions can be homemaker/parent and non-financial.
These important contributions can include the following:
- Providing care for children;
- Cooking, cleaning, gardening, and making meals for the family;
- Any maintenance you’ve done to your property that resulted in a monetary saving
- Renovations/ building works that you have undertaken you’ve made to the property that has increased its value;
- Working in your partner’s business without receiving remuneration.
Step 3- Identifying Each Party’s Needs
Once the court has determined and assigned the contributions to each party, it will then move on to identifying each party’s needs. The court will then consider the future and present needs of each party. Age, health, ability to earn income, and whether you have children are the most important requirements for dividing property and assets.
Other factors, such as access to your family and inheritances that you may be entitled to in the future, will also be taken into consideration. The court will usually compare the needs of each side and adjust the percentages of the property pool according to their judgement to balance the division.
Your needs, just like the previous step, will be a major factor in determining your answer to the question “What rights do I have in a divorce in Australia?”
Step 4: Is this just and equitable?
This is the final step to determining if you are entitled to an Australian divorce.
This is basically the court taking an introspective step, looking at the plan of the division of assets and asking if it’s ‘just and equitable under all the circumstances?
If the answer is no, then the court will make any adjustments that were not made in the first two steps.
If you are in a de facto relationship, the property settlement deadline is 24 months from the date of your separation and 12 months from the date that your divorce was finalised if you were married. You must act as soon as you can to obtain a settlement if the deadlines are approaching.
It Is Important to Seek Legal Advice
When trying to answer the question “What am I entitled to in an Australian divorce?” it is important to remember that there is no definitive answer. To get an idea of the potential outcomes, you should consult a qualified Perth family lawyer.
So Where Can I Get Help?
Good professional advice from a Perth family lawyer should be your top priority when going through a divorce. This means speaking to a family lawyer in Perth before signing on the dotted line. Contact us at Burra-Robinson Family Lawyers today. A counsellor may be a good option too.