The breakdown of a relationship can be a difficult and confusing process. One of the more difficult aspects of relationship breakdown is often the division of property. Below are some of the things a court will consider before making and orders for division of property or maintenance. Engaging and experienced family, who can explain to you the process and provide advice, can help ease a lot of the stress associated with this process.
The matrimonial property of the parties can be divided as soon as the parties have separated and there is no likelihood of reconciliation. That is, you do not have to wait until your divorce is finalised to start dividing property.
Division of matrimonial property is governed by section 79 of the Family Law Act 1975 (Cth). There are four main steps that a court will take when dividing matrimonial property:
- Determine the net value of the assets;
- Consider the contributions of each party, including any non-financial contributions;
- Look at the “future circumstances” of each party; and
- Decide what is just and equitable in the circumstances.
Determining the value of net assets
The court will identify and then place a value on all assets owned by the parties, both individually and separately, such as:
- all real estate;
- cash and investments;
- personal property such as cars, household items, jewellery etc; and
- superannuation or other benefits.
In determining the extent of each partner’s contribution to the matrimonial property, the court will look at both financial and non-financial contributions.
Financial contributions will include direct or indirect monetary contributions, such as through employment. Non-financial contributions include contributions made in the capacity of homemaker – care of children, housework etc.
The court will take a very general look at these contributions, that is, it will not go into specific detail about who washed the dishes or cleaned the car.
Unless there are some special circumstances in the relationship, the court will usually regard the contributions of the parties as being equal. That is, the contributions of the primary caregiver for the children and homemaker are regarded as equal to the contributions of the ‘breadwinner’. However, each case will depend on its own facts.
The final step for the Court is to consider the ‘future circumstances’ and need of the parties. If one spouse is in more need, the court may make an order for spousal maintenance.
For a court to order spousal maintenance, it must be satisfied that:
- the person applying for the maintenance needs it; and
- the other spouse can afford to pay it.
When determining the ‘future circumstances’ of the parties and spousal maintenance, the court will take into account:
- age and health, both physical and mental;
- capacity to find appropriate employment;
- assets and financial resources of the parties;
- eligibility of either party to Government benefits;
- the duration of the marriage and the affect of any years spent as a homemaker that may have affected one of the parties ability to re-enter the workforce;
- commitments of each of the parties that are necessary for them to support themselves; and
- responsibilities of either party to support another person;
- the standard of living and whether this standard is reasonable;
- if either party is co-habituating with another party, the financial circumstances relating to that co-habitation; and
- any child support that may be payable.
The reason for the breakdown is not relevant in determining spousal maintenance.
Justice & equitable in the circumstances
After the court has completed the first three steps, it may make a further adjustment of the property interest of the parties if justice and fairness requires. For example, if the property pool is very small, the court may determine that in the interests of justice and equity, it would be fair to give more to the party that will be disadvantaged in the future.
De Facto Relationships
While de facto couples do not come under jurisdiction of the Family Law Act and cannot go to the Family Court, they are still entitled to a division of property once the relationship ends (provided that the relationship has lasted for more than 2 years).
When dividing property, section 20 of the Property (Relationships) Act directs the court to take into consideration the contributions of the parties, both financial and non-financial, similar to what is required unde the Family Law Act.
There is no automatic entitlement to claim maintenance for de facto and same-sex couples. However, the court does have power to make an order for maintenance if the party seeking the maintenance:
- has the care of a child under 12 years of age or, if the child has a disability, under 16 years of age; and
- cannot support themselves because their earning capacity has been affected by the circumstances of the relationship.
The court will also consider the ability of the other party to pay maintenance, considering similar factors that would be considered for married couples.
The division of property after a relationship breakdown can be a difficult process and may take some time. It is important that you consult an experienced lawyer who can guide you through the process and make sure you receive your full entitlement.
This information has been prepared by BPC Lawyers and is general advice only. This article does not take into account your personal situation. Before acting you should obtain legal advice in relation to your particular circumstances. The information contained herein is current at the date of publication, the law frequently changes and as a result the information can be utdated and no longer correct. This article is for the information of clients of BPC Lawyers and is not intended as an advertisement or promo.
By Barry Beilby
Publish Date: November 8, 2007