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Caldwell Martin Cox Solicitors : Family Law : Property Settlement
In Family Law, division of property is generally managed according to the following steps:
Step 1 - Identification of interests of the parties in all assets, liabilities and financial resources
It does not matter in whose name these items are held. A full list of the items and their values (or estimated values) needs to be ascertained. Whilst most people understand what assets are, they often underestimate what can be included as assets - business interests, superannuation entitlements, tax refunds due to a party, or debts owed by third parties. Similarly, people often do not realise that liabilities can include taxation liabilities, which in some circumstances, can be quite substantial. Financial resources can include an interest as a beneficiary under a Will or trust, or a life estate in property.
Step 2 - Assessment of Contributions
Contributions can be financial or non-financial. They can be made by a party directly or indirectly, or made by a third party on behalf of a party to a marriage. Contributions considered are:
Initial contributions
Those made by each party at the commencement of cohabitation (i.e. assets held by them prior to cohabitation). It is important to note that for long term relationships, less weight is placed on these ‘initial contributions'.
Contributions made by parties during the period of cohabitation
These can include:
- sole contributions by a party through inheritance, a compensation claim, gifts, interest free loans or physical assistance rendered by family members (e.g. when building a home)
- contributions from earnings of a party or (in many cases for wives) through the performance of the role of homemaker and primary parent. It should be noted that Courts most often regard the role of a wife as parent and homemaker as being an equal contribution to that being made by a husband as breadwinner.
- other non-financial contributions such as performance of maintenance work around the home, performing the role of owner/builder, or working to renovate or improve property.
Contributions after separation
Contributions after separation are rare if a property settlement occurs shortly after separation. However, if property settlement occurs well after separation, such contributions may become relevant. Common contributions include:
- contributions to mortgage repayments
- performance of improvements to property
- receipt of a redundancy payment, inheritance or other similar lump sum.
In some cases, where one party fails to meet an obligation (for example, to pay child support, forcing the other party to draw on capital in order to meet living expenses), a Court may determine that the defaulting party has made a negative contribution to the property since separation and may take this into account when assessing entitlements.
Step 3 - Adjustment of the parties' interests in property following a consideration of Section 75(2) factors
These factors relate to those set out at Section 75(2) of the Family Law Act 1975 . Broadly, they include:
- consideration of the age and health of the parties,
- the duty of the parties to support children or other persons,
- income earning capacity of the parties,
- the financial resources of the parties and other relevant matters as circumstances dictate.
Usually, the party that has the duty to support children also has a lower income earning capacity and less financial resources than the other party. In those circumstances, they would therefore receive a percentage adjustment in their favour.
For further information and assistance please call or email any member of our family law team.
Visit our Reading Room for more information on Family Law issues.
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Law 9000
Lic.Law 20008
SAI Global
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The information you obtain at this site is not, nor is it intended to be, legal advice.
You should consult a lawyer for individual advice regarding your own situation.
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