Property issues in family law are those involving the division of assets and liabilities after separation. They are also referred to as financial matters. Under family law, ‘property’ includes many things, not just cash and houses.
Property can also include:
- the family business
- a trust
- an entitlement to be paid
- a pension entitlement
- money you owe
- any other liabilities of the relationship.
Superannuation is included in property distribution, but is not necessarily treated the same way as other property.
How is property divided?
All property will be included for consideration in the financial distribution after separation.
It is important to divide your property legally. You might divide property by informal agreement, but if you don’t do this according to the Family Law Act and your former partner later pursues a further share of the property, you could be in for a nasty surprise.
It’s not just about what you own and owe; it’s about what you’ve contributed. The roles you had during your relationship and who has made what contributions are factors that will be considered when dividing up your property. What each of you is likely to need in the future is also taken into account. Relevant factors are whether there are any children under 18 and who they will live with, and the age, state of health and earning capacity of each party.
It is very important that you tell the truth about what you own, to each other and to the court. This is called ‘full and frank disclosure’. If you don’t you could end up transferring a lot more to your former partner as a result.
It is important not to spend or conceal large sums of money or destroy property in an attempt to minimise the amount your former partner will get. This is likely to backfire and may be deducted from the property that you receive in the distribution.
Financial and property tips
Below are some financial and property tips when facing a family issue:
- Keep as much of the personal property as you can. The cost of replacing personal property will always vastly exceed its ‘value’ in family law calculations (Which is second-hand auction value – a brand new fridge that cost you $1,500 might be worth $500 if you auction it.)
- It is often advantageous to get matters settled as soon as possible after a separation – especially if the other person is feeling responsible for what happened. Conversely, be careful of making a settlement when you feel guilty or responsible for the breakdown of a relationship.
- Get financial advice about how realistic proposals are. You may really want to keep the family home, but if you don’t have the income to pay off the mortgage, it may not be practical for you to do so. Even if you can pay off the house with your income after the split, how much will be left over for you to live on?
- Make sure you get legal advice quickly if there is a danger that your ex-partner might dispose of an asset you might not be able to get back.
- Don’t think you can remove property from a distribution by transferring it out of your name or ‘giving’ it to another person.
Frequently asked questions
What are assets?
Compensation, damages awards and inheritances will normally be included in an asset pool, if they are in existence at the date of reckoning. But inclusion in the pool does not automatically mean the other party is entitled to share in the value of these ‘assets’.
The factors taken into account to determine the contribution made by the party who received the compensation, damages or inheritance will vary depending on the circumstances of each case.
Now that we’re separated, my ex will be able to take all my money because the kids mostly live with her? OR Now that we’re separated, my ex will get to keep all the money because he’s the breadwinner and I won’t be able to support the kids?
Neither of these is true.
Nobody will get to keep “all the money” – not you and not your ex either. Instead, the law tries to ensure that both are financially supported, with the amount and method of support depending on the circumstances in each case.
Provision for the kids through Child Support can be sorted out in a number of ways. If you are worried that your partner used to support you financially and now you don’t have any source of income, you may want to investigate applying for spousal maintenance (even if you were not married).
Do you get access to more assets if you gain custody of the children after separation?
Family law is a discretionary jurisdiction – meaning that the courts have wide powers to make Orders. Many facts are taken into account to determine how assets will be distributed. Parties’ contributions and their perceived needs will be assessed.
Care arrangements for the children is just one of many matters that will be considered. There are no requirements in family law for fixed percentage distributions in any circumstances.