At the end of the relationship, one of the loose ends that needs to be tied off is a property settlement.
When we advise clients about a property settlement, we give advice in the shadow of the Court, ie we follow the same steps that the Court takes:
– stand back and look at the asset pool now, ie where the assets and liabilities lie, and decide whether or not there needs to be any change.
– if there should be a change, and there will be a change if there are joint assets or there is superannuation to be split, then the next step is to make a list of the assets and liabilities and their values. All assets must be considered, it does not matter if they were owned by a party before the marriage, or they have been acquired after separation, or they are the result of an inheritance or gift.
– past contributions. The Court considers that contributions as a homemaker and spouse are as valuable as contributions by a person who goes out and works and earns income. Contributions can be as follows:
a) Contributions at the beginning of the relationship by parties bringing in assets that they owned before they began living together;
b) Contributions received during the relationship, eg. an inheritance or gift;
c) Non-financial contributions, eg. maintaining the home/garden;
d) Contributions can be made by others, eg. children who work without pay in a business.
– is to consider the relevant Section 75(2) factors and the “big ticket” items are:
The age and state of health of each party, so for example if one party was 75 years old and in ill health and
needing to go into a nursing home, they would need more finances than the other party who might be 50 years
old and in good health;
The income of the parties. If one party was earning $150,000 per annum and the other was earning $20,000 per
annum, there would be an adjustment in favour of the low income earner;
Who has the care of the children – if the parties had young children, the primary carer would receive an
adjustment in their favour.
– is to consider all of the above and then make a decision which is just and equitable (fair in all the circumstances).
There are some myths about property settlement, and the ones we hear all the time are:
- “If you have the children you get more”…this is just one aspect of a property settlement;
- “She got the lot!”…whilst it is possible, we have not come across property settlements where one person gets 100%.
At a first consultation with a new client, we can generally give them a pretty good idea of what the outcome will be. It is unusual for a dispute about property settlements to go to a trial, and most people are able to settle such a dispute fairly quickly.