Imagine. You and your husband are going through a divorce. It’s hard enough trying to negotiate over the kids, but trying to divide the property of the marriage is looking like an impossible puzzle.
This is the big life stuff; the stuff that we always feel that we’re too young to cope with or are simply not ready to confront. Where to start? Having an understanding of how the law operates will really help you to work it all out.
Separation or divorce?
Property rights don’t just arise when a married couple separates.
Couples who have been in a domestic partnership for two or more years can also have property rights. In either scenario, there will be property division issues if a couple separates and can’t agree on how to split the property.
If parties are able to negotiate and agree upon what happens to their property after separation, the process can be dealt with fairly quickly and with minimal legal involvement. But often this can’t be achieved for many reasons, for example the property issues are too complex.
Sometimes there is no choice but to go to court to sort it all out. When this happens, the Court will use a 4-stage test to work out who gets what.
Family Court’s Four Stage Test
Stage 1 – Assessing the asset pool
The first thing the Court will do is identify the pool of property belonging to the parties. This includes large assets such as real estate, cars, investments and superannuation. It also includes any debts, for example, mortgages, other loans and credit card debt.
The Court will also consider whether the property is held jointly (in both parties’ names), separately (in one party’s name), or is held by anyone else.
The Court will look at the property pool as at the date of separation. For this reason, it is essential that you:
:: Know your date of separation (and have evidence to prove it, if necessary).
:: Make a detailed list of assets and debts as at the date of separation. You should also specify in whose name the property is owned, and who has control of it. This will reduce the amount of time your lawyer needs to spend on your case and so will usually save you money.
Assets such as real estate and cars may need to be valued by an expert. If the parties can’t agree on an expert, the Court will appoint one.
Stage 2 – The parties’ contributions
Non-financial contributions can be as important as financial contributions. For example, if one partner gives up work to look after home and children, the effect may be that the other partner has been able to significantly progress their career. The Court will recognise the important contributions by both parties.
Contributions can be:
:: Direct financial (for example, earning an income).
:: Indirect financial (for example using own labour to renovate the family home).
:: Non-financial (for example, parenting and homemaking duties).
The Court will also look at contributions that were made at the beginning of the relationship and those made after separation.
Stage 3 – Future needs of parties
Working out the future needs of the parties is a very complex process. The Court must weigh up a number of factors including:
:: Employment circumstances
:: Care of any dependent children
:: Financial resources
For example, if one party is in poor health, unable to work and cares for the children most of the time, the Court may award them a greater share of the property because they are unlikely to make a financial recovery.
Stage 4 – Proposed orders
Usually, the parties’ lawyers make suggestions to the Court about the orders it should make. The Court then has to work out whether those proposed orders are fair and reasonable.
Sometimes, the orders can be straightforward. For example, if the marriage was short (say, less than 2 years), there were no children and the parties both contributed a major asset. They may simply take away what they contributed.
But property divisions become more complex when the marriage or domestic relationship is longer, when there are children, and if one person was the homemaker and carer while the other party worked. In these cases, the Court might start at an assumption that the division is 50:50, and then take into account all the other factors to arrive at a final decision.
Property settlement proceedings can be confusing and stressful, but the good news is that a family law specialist can work to secure an outcome that is in your best interests.
Websters Lawyers’ team of family lawyers are experienced in all areas of family law and are known for their empathy, legal knowledge and outstanding negotiation abilities. Contact us today for a free first interview to discuss how we can help you.
This article provides general advice only. For advice specific to your needs, you should consult a lawyer.