Financial Separation for married, de-facto or same sex couples
When the decision has been made to separate from a spouse or partner, there are several factors to consider which are sometimes complicated and often emotional.
The number and ages of children, contributions before and during marriage or de facto relationship and the ability of the parties to financially recover from the separation are just some of the matters that need to be considered. Each separation and the combination of the above are different. That is what makes Family Law complicated and why you need to engage the services of a Family Lawyer.
Unfortunately, there are no set rules in dealing with financial separation. Contrary to popular belief, there is no presumption that assets should be divided 50/50, 60/40 or in any other subjective proportion.
Section 72(2) of the Family Law Act provides a guide to both judges and lawyers of the factors that should be considered. The following matters are some of the most common factors that should be taken into account in apportioning the asset pool:
The current value of the assets and liabilities. All assets and liabilities of the relationship need to be identified to establish a ‘net asset pool’. This includes superannuation entitlements, as well as assets held personally, in partnership by trusts or by companies.
The direct financial contributions made by each person to the acquisition of the assets or the preservation, improvement or maintenance of those assets. This will include assets owned at the commencement of the relationship.
The indirect financial contributions made by each person to the relationship, for example, the giving up of a career to allow the other person to further their own career.
The non-financial contributions by each person, such as caring for children, being the homemaker and maintaining or improving the assets by personal exertion such as individual efforts in renovations that increase the value of an asset.
Identifying the future needs of the parties, for example, age, health, financial resources, care of children and income earning capacity.
A question that is often asked of our firm is whether inheritances or any other type of windfalls are taken into account in a financial separation.
Inheritances and other windfalls must be considered in the same manner as all of the other contributions made during the relationship– financial, non-financial, homemaker and parenting. That said, the timing and size of the inheritance or windfall are important and impact on how this amount is ‘shared’. For example, a windfall received early in the relationship is likely to be treated equally while a windfall received shortly before separation is less likely to be treated equally.
If you would like advice, guidance or assistance about property separation and your entitlements,contact our office to discuss your options. The more information and specialised advice you have available, the better a position you will be in.