FAMILY LAW AND PROPERTY

When separation is considered in a struggling relationship, it is natural for people to contemplate what they are likely to receive financially post-separation. In order to determine how assets are divided, the Family Law Act implements a procedure which consists of the following steps:

ESTABLISHING A NET ASSET POOL OF THE PARTIES INVOLVED:

To determine the asset pool a brief balance sheet is filled out, outlining the assets, liabilities and superannuation of both parties.

Here, all assets are taken into consideration, regardless of whether they were obtained before or during the marriage, or after separation. The term “property” in such cases extends to anything of value such as motor vehicles, real estate, shares, savings and jewellery.

CONTRIBUTIONS TO THE RELATIONSHIP:

For this step, each partner’s contribution towards the marriage/de facto relationship, whether financial or non-financial, is calculated. This includes contributions in the capacity of a home maker or parent (i.e being responsible for the children’s schooling, medical treatments etc), gifts, inheritance, and compensation payments are also included.

FUTURE NEEDS AND EARNING CAPACTIY:

In this step, the court will assess and evaluate what the parties may require post-separation. The court takes into account several factors such as age, health, disparity in income and other financial circumstances.

IS THE RESULT JUST AND EQUITABLE?

The final step is to consider the practical effect of the proposed property division, to ensure it is just and equitable. This is due to the fact that the split may seem appropriate in a numerical sense, yet unfair in a practical sense.

In some cases, the court may not even find that it is fair to even adjust property interests due to certain circumstances of the case. Before doing anything, the court must consider if it just and equitable to exercise its power in changing the parties interests in property.

It is extremely important that parties make full and honest disclosure about their financial circumstances, to ensure proceedings are fair. Failure to do so can result in severe consequences. Whether or not an agreement can be reached, the rules regarding property division are complex. It is for this very reason that legal advice is highly recommended before making a final decision. Our experienced family lawyers are always willing to help you reach the best result possible. Should you require any assistance in such matters, contact us on 9304 3344 to schedule an appointment at our Melbourne CBD or Glenroy office.