How much of the property pool am I entitled to?
Introduction
When a relationship comes to an end, one of the most pressing concerns is often the division of assets. Determining how much of the property pool you’re entitled to can be a complex and emotional process, influenced by various factors unique to your situation. At Croy Legal, we understand the importance of clarity and fairness during this challenging time. In this article, we’ll explore the key elements that courts consider when dividing property between separate parties. We aim to provide you with a clearer understanding of what to expect and how you can protect your interests as you navigate this critical aspect of family law.
The four-step process
The Federal Circuit and Family Court of Australia follows a four-step process to determine how assets are split in a property settlement. This four-step process has developed through case law but specific provisions in the Family Law Act 1975 (Cth) underpin the process, specifically sections 75(2) and 79(4). Importantly, there is no presumption that a marital division is fifty/fifty. Each case is different and should be determined on its merits and what the court considers is just and equitable in the circumstances.
Step 1: Ascertain the marital asset pool
The first step is to determine the asset and liability position and financial resources of the relationship. The parties would need to agree on the values and if they cannot come to an agreement or a compromise then the asset would need to be formally valued by an independent jointly instructed valuer.
Step 2: Assess the contributions of the parties
A list of all the different types of contributions that the Family Court considers is set out in section 79(4)(a), (b), and (c) of the Family Law Act. For de facto relationships, the equivalent provisions can be found in section 90SM(4)(a), (b) and (c)).
The Court looks at the history of the relationship to determine the contributions of each of the parties under the following headings:
a) Financial and non-financial contributions;
b) Direct or non-direct contributions;
c) Contributions as a parent and/or homemaker; and
d) Contributions to the acquisition, conservation, and improvement of assets.
The Court assesses the contributions of each of the parties at three distinct periods through the relationship. These are:-
a) At the commencement of the relationship;
b) During the relationship; and
c) After separation.
Negative contributions may be relevant where it is evident that a spouse has wasted assets (eg excessive gambling) or a spouse has been violent towards the other.
If the Court finds that the wastage was disproportionate to the overall asset pool then it has the discretion to allow an add-back to the spouse who had not engaged in wasteful conduct.
Step 3: Assess the parties’ future needs
The Court takes a look into the future of the parties to identify and assess any of the relevant matters in s75(2) and also s79(4) to determine whether there should be any further adjustment of interests based on future needs. These factors include the age of a party, their health, whether a party is caring for children or an elderly parent, whether a party has disabilities, and whether their future employment prospects and/or earning capacity has been negatively impacted.
Step 4: Assess whether the proposed split is just and equitable in all the case circumstances.
At this step, the Court determines whether the proposed orders are equitable in all the case circumstances and as required by section 79(1). The Court has wide discretion to make orders or to alter orders to ensure the result is just and equitable. For parties reaching a settlement agreement out of court, it is important that the parties are satisfied that the final agreement is just and equitable.
Conclusion
Understanding how much of the property pool you’re entitled to is a crucial part of navigating the separation process. While every situation is unique, having a clear grasp of the factors that influence property division can help you approach negotiations with confidence. At Croy Legal, we are committed to providing the guidance and support you need to ensure a fair outcome. If you’re facing the challenges of property division, our experienced team is here to assist you in securing your rightful share of the property pool and protecting your future.
For more information or a comprehensive assessment and legal advice about your potential entitlements, please contact Croy Legal’s family law team on 1300 123 876.
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