One of the most commonly asked questions of family lawyers is what each person is entitled to when a marriage or defacto relationship breaks down. There are also a lot of misconceptions which can lead to getting an unfair assessment of the true nature of the property settlement that you are entitled to.
Basically, property settlement is determined by the application of a four step process.
The totality of the assets held by the couple is ascertained by the court. Potentially anything with a pecuniary value can be an asset taken into account. For the purposes of this step, it doesn’t matter how the asset was acquired. It is simply a question of what the asset pool was at the date of the hearing of the matter or the signing of a relevant binding financial agreement. Assets include cash, property, superannuation, foreign currency, shares, debentures, cars, boats, personal items, inheritances and anything else that is potentially of a pecuniary value.
The court or the legal practitioners negotiating the matter must then assess the contributions of each of the parties to the acquisition of the assets. This includes financial and non-financial contributions without either necessarily being more important. Financial contributions include the earning of salary and wages, business entrepreneurship and other activities that allow the couple to acquire assets. Non-financial contributions include household work, caring for children, maintenance of the home and other activities that allow the couple to acquire the assets referred to above.
3. Future Financial Needs
The court is duty bound to take into account the future financial needs of the parties based on their age, state of health, future employment prospects and earning capacity. The applicable principle is that neither party should be left destitute as a result of the property settlement. Each has an entitlement to a reasonable standard of living presuming that the assets of the relationship are sufficient to allow both parties access to a reasonable standard of living subsequent to the division of property.
4. Practical Effect in Terms of Fairness
Finally, the courts must, when assessing a property settlement make an assessment of the overall effect of the divorce in terms of fairness. Notoriously vague, this final consideration means that the global result of the property settlement must be considered a fair division of the property of the parties when all of the factors above are taken into account.
If you have questions about your family law settlement or family law proceedings, please do not hesitate to contact us.