Does divorce really mean 50% division of assets?
Divorce or separation can be a very emotional time where even the most amicable couple can disagree on things. And unfortunately, these high-running emotions can be heightened depending on the circumstances surrounding it. Then you add in the decision around finances and property and it can all become an emotional whirlwind. This makes it all the more important to focus on the facts but unfortunately this can be difficult, due to misinformation and generalisations out there on this subject.
One of these is the common misconception that in a divorce, everything will be split down the middle. Giving each party an even 50% of everything.
The truth is, neither party is automatically eligible for 50% of anything as nothing is ever as cut and dried as that. There are the needs and circumstances of each individual to consider for instance, one may have been working to pay the bills but the other has been at home raising the children and running the household. This is why it’s important to seek professional guidance around any settlement discussions.
The family law act is there to ensure that everything is settles in a fair and just manner, and this is handled by the Family Court. There is a process to it which can help guide you on where to start. The process they take is a four-step approach and it looks like this:
- Understanding – here they’ll consider what assets are held individually, jointly, in trusts, businesses or companies – including superannuation.
Basically, it’s all the assets that could be considered shared by you but are not necessarily in both your names. If you only consider things that are in both names, like a house, it can result in the division looking fair on the surface but in reality, one party may have walked away at a substantial (and unfair) loss.
- Identifying overall contributions – here they look at what both parties brought to the table. They’ll look at both the financial and the non-financial contributions made.
The law recognises that contributing money is not the only way to contribute to the wealth of a family. Giving up work to care for children or even renovate the home can still be considered a contribution. A gift or loan from family could even be considered.
- Considering the future – this is where they decide on the individual needs and future considerations of each party. Things such as health, age, how the care of the children will be shared, whether there’s a great difference in each person’s earning capacity and their access to money. Ultimately, they’re looking to make a decision which is considered fair for all parties involved.
- The final say – once they’ve taken all the above into account, they’ll make a decision on whether the proposed property settlement is just and fair for all parties involved. In Australia, there are no set rules on who gets what, each case is up to the discretion of the judge as to what they think is most appropriate, based on the first three steps.
Article provided by Australian Family Lawyers