If you are going through a property settlement, irrespective of whether you are married or in a de facto relationship, the Family Law Act is what the court will use to work out how to divide up your property.
When we talk about property we mean everything that you and your partner own. It does not matter if your home is registered in your name or your partner’s name or even in another family member’s name.
If you own it, or part of it, it will go in the list. This is also the case for debts and other liabilities.
It includes things such as your house, your car, superannuation, savings and shares. It is anything that you own that will come into this conversation.
There are four steps we work through as lawyers when trying to advise you about your property division.
The first step is to understand all the property that you and your partner have. We do that by writing a list of all the assets, all the debts, superannuation and anything else that you have that might be worth money.
The value of these things is on the day sit down and talk to us or if you end up in the court process it will be the value as at the date you reach an agreement or find yourself in front of a judge at a hearing.
The second thing we look at is how the two of you, either individually or together as a couple, created the things on that list. In the legal sense we use the word “contributions” to describe this.
Contributions means how each of you contributed to the asset pool that you have. It might be that one or either of you had assets at the beginning of your relationship and we call those initial contributions, being something that you brought in.
Or it might be that throughout the course of your relationship there was a contribution made by one or both of you such as a gift from family, an interest-free loan or some other larger amount of money from such things as an inheritance or personal injury compensation.
Other common types of contributions are income earned from your employment or it might be one of you was a stay at home parent and contributions as homemaker and parent are just as valued and just as important as those made earning an income.
So we weigh all those things and balance them up which is then expressed as a percentage and it is quite a fine art in terms of how we do that.
The third thing we then look at is the future needs factors as they are often called by lawyers.
In this stage we try to work out what, if any further adjustments over and above your respective contributions, need to be made to one party or the other to compensate or make allowance for a greater future financial need or a disparity in income earning capacity that has arisen as a consequence of your relationship.
So things here that might be really important and relevant are whether there are children and if so who’s looking after them and how they are financially going to be supported.
Quite often one parent stays at home caring for the home and children while the other parent pursues a career and earns the income. It is very often the case that because of this one of you has managed to advance their career and work skills, resulting in them being able to earn a lot more money into the future than the stay at home parent whose ability to earn has been compromised because they have been out of the workforce and may now have the care of the children.
Other things that are relevant are your age and state of health, your children, their age and needs and who will be caring for them, your income, your partner’s income and how this may be affected by the property settlement.
There are a wide variety of other potential factors but these are the main things I guess we generally consider on a day-to-day basis, and again we have to weigh all of those things up to work out what further adjustment if any is likely.
The fourth and final step we have to consider is whether the division of the property the two of you have is “just and equitable”. Importantly this is not one and the same as “fair”.
It’s not about trying to find an outcome that is fair, it’s about finding an outcome that is appropriate at law and for every family this is different.