This article addresses the common issues raised when couples are separating and concerned about who is entitled to what.
As Divorce Lawyers, three common questions our clients ask when separating are;
- What am I entitled to?
- How will our assets, including the home, investments and our debts be divided?
- What percentage do I get to keep? Is it a 50/50 split?
When couples separate, they will need to divide their assets (property, shares and other investments) as well as their liabilities (such as mortgages and loans). All assets and liabilities held by either party or jointly form part of your asset pool and are available for division. Many people think that assets in their name are theirs and will not form part of the asset pool for division. Another common misconception is that there is a 50% rule or starting point.
How does a court decide how to divide assets and liabilities?
There is no formula used to calculate the division of assets and liabilities on separation. The appropriate distribution is determined by reference to what is just and equitable in each case based on the unique facts and circumstances.
The Division of Assets is NOT governed by a 50-50 Rule.
In the absence of an agreement between the parties, the Family Court decides how a couple’s assets are to be divided. For married couples, the Family Law Act 1975 sets out the general principles the Court considers when deciding financial disputes after the breakdown of a marriage. The Family Court Act 1997 contains mirror provisions in respect of de facto couples in Western Australia.
There is no general principle or ‘starting point’ that all assets should be divided equally.
Key factors considered by the court:
Value of Assets: The Court must first determine what property is owned and any debt or loans in place, and the value of each. Your assets may include interests in companies, trusts or other business structures, shares, investments, real estate (such as the family home), contents, motor vehicles, savings and superannuation.
Consideration and assessment of your respective contributions, including:
a) Financial Contributions: Includes income such as wages, salaries, bonuses, dividends and distributions received; also includes inheritances, gifts and windfalls of either party.
b) Non-financial Contributions: Includes improvements to the property other than by financial means, such as renovating, landscaping and improvements.
c) Homemaking and Parenting Contributions: the contributions by either party to the welfare of the family, including care of the children and homemaking tasks.
Future needs: Includes age, health, financial resources, care of children and ability to earn in the future. The Court may make an adjustment to your property settlement entitlement based on whether these factors apply in your case.
Justice and Equitability: The Court lastly considers the effect of the proposed division and whether it is otherwise just and equitable in the circumstances, and may make a further adjustment to the outcome if appropriate.
The information provided in this article is of a general nature and should not be relied upon for your family law matter. We recommend you book an appointment with us to discuss your situation.
About KERR FELS – Divorce and Family Lawyers
Kerr Fels is a boutique law firm practising exclusively in family and divorce law. We offer experience in settling complex financial matters arising from separation involving business entities, trusts and large asset pools, in addition to negotiating simple divorces.
We are conveniently located in the Perth CBD.
Our philosophy is to provide client-focused cost effective, efficient and pragmatic legal advice.
Book an appointment today.
P> (08) 6381 9080
L> Level 26, AMP Tower, 140 St Georges Terrace, Perth, WA, 6000