Divorce Property Settlement Examples in Australia
You’ll probably come to the conclusion fairly soon that the law seems to offer you very little assistance when it comes to determining what constitutes a just and equitable property settlement in your particular case. How can you translate “just and equitable” into a concrete percentage (percent) or cash ($) amount?
You’ll be curious about the size of your divorce property settlement after you separate.
The purpose of this article is to provide readers with a better understanding of how Australian courts divide a couple’s assets when they separate or get divorced.
We also describe how the Family Law Act specifies that financial and non-financial contributions are evaluated.
The Family Law Act of 1975 gives the courts the authority to modify the parties’ property interests if they determine that doing so is just and equitable.
The Courts must take into account the parties’ respective contributions to the property as well as other elements, such as their future requirements while deciding on this decision.
The financial and non-financial contributions that each party made to the property must be taken into account by the courts.
Additionally, they must see to the welfare of the family and the upbringing of any joint children.
A divorce property settlement is challenging because of this. There are multiple things that need to be considered and there is no hard and fast rule of who gets what.
It can be arduous and time-consuming to verify the financial contributions made by each party, but if there is a clear money trail, it is simple to figure out how much each party contributed.
Placing a value on non-financial contributions is quite challenging because there are numerous factors involved.
Are Divorce Property Settlement Examples Accurate?
It makes sense that you would be interested in case studies since you want to locate a circumstance that is comparable to your own so that you may imagine what might happen there. This is because, generally speaking, we prefer to think personally and practically rather than conceptually or theoretically.
On the other hand, family lawyers are trained in conceptual thinking; they investigate the law before applying it to the specific facts of your case. Your preferred method is to look at another person’s facts (i.e., a real case that is comparable to your own) and come to pertinent conclusions for you. That’s reasonable and comprehensible because everyone thinks differently, and the legal style of thinking was developed over many years of arduous study and practice. It is not a natural way of thinking.
There is another approach to get information that is easy for us to understand and that is statistics. Statistics offer one very distinct benefit over case studies: they give us information about many cases, whereas a case study only gives us information about one particular example. We are discussing reported decisions since the best case studies will include details about an actual case. The case studies that are solely made up to “illustrate” a point are the least helpful; we need to be certain that the individual who created the made-up case study applied the law correctly and that the law has not changed since that time.
Example of Divorce Property Settlement
It’s in our nature to look for situations that are comparable to our own so that we may decide what to do and envision the possible outcomes.
Constance and Drago are divorcing. They have been married for eight years and have been a couple for fifteen years.
- Drago makes $87,000 a year from his full-time job.
- Constance makes $68,000 annually from her part-time employment.
- They have two kids, ages four and six.
- $670,000 family home with a mortgage of $250,000. Valued at $420,000 nett.
- Family vehicle number one is a $24,000 Subaru Forester with a $12,000 loan. Net worth: $12,000
- Holden Commodore, second family vehicle. Net worth: $8,000
- Furniture. Net worth: $25,000
- the account shared by two people. Net worth: $15,000
- shares of Westfarmers. $10,000 in nett worth.
- Account for joint transactions. with a $500 overdraft, it is $1,200. Net cost: $ 700.
- joint charge card Debt of $8,000.
Assets and liabilities of an individual
- Drago Retirement. $300,000 in nett worth
- Constance Retirement. Valued at $120,000 nett.
- Savings account for Drago. Net worth: $20,000
- dragging boat Total cost $5,000.
Specifying what they contributed:
Constance and Drago have both worked throughout their relationship. Constance has worked part-time since having kids so she can look after the kids two days a week. She is in charge of driving the kids to and from daycare and school as well. Drago travels a lot for work, thus Constance is frequently left in charge of the kids on her own, despite the fact that they try to divide the childcare duties after work. Additionally, they both agree that Constance’s inability to accrue superannuation was hampered by her part-time employment and protracted maternity leaves. Constance and Drago have decided that the property should be divided with an adjustment in Constance’s favour because Constance is the parent who is responsible for the majority of the children’s needs.
In light of the section 75(2) considerations:
Being in their late 30s, Drago and Constance are both likely to be able to work till retirement. They admit that Constance will probably have a lot more care obligations than Drago and that the children should live at each of their homes. Constance won’t be able to continue working full-time as a result of this. They concur that the property split needs to be revised to account for Constance’s lost potential income in light of this.
Are assets divided equally in Australian divorces?
The majority of people believe that when a couple separates, a 50/50 asset split is the most equitable result. However, this isn’t always the case. Couples hardly ever decide on a 50/50 divide, in reality. There is no predetermined percentage split allowed by the Family Law Act of 1975; each case will be handled differently. The most typical division, however, is a 60/40 split. This typically happens when one person makes more money while the other has a greater share of the obligation for caring for the children after the divorce, or may have a limited ability to earn money or less superannuation. Once all of the assets and liabilities have been valued, the key criteria that influence the percentage split are the future needs and capacity of each partner to support themselves and their needs. Read the section above headed “What am I entitled to in a divorce settlement?” for other instances of percentage divisions.
How can I safeguard my possessions from a divorce?
There are numerous methods you may safeguard your possessions. A legally binding financial agreement is one of the four choices available to spouses when dividing their assets and can be signed before, during, or after your marriage.
This is known as a prenuptial agreement if it is signed before to getting married. While some people believe that prenuptial agreements are only used when a marriage is predicted to fail, you may compare them to health insurance because most people don’t anticipate getting sick, but they still have it. A binding financial agreement is a written contract that specifies how property and debts will be distributed in the event of divorce. It is final, therefore the court will only be able to overturn it under unusual circumstances.
Starting the financial settlement process as soon as you split, as opposed to waiting for your divorce to be finalised, is another approach to protect your assets. This precludes any modifications to the asset pool—positive or negative—from being taken into account in the settlement. This might occur, for instance, if one spouse spends a significant amount of the couple’s joint funds after the divorce or incurs debt. On the other hand, you might buy a house or get an inheritance after your divorce that you don’t want included in the asset pool.
Is it possible to revisit a divorce settlement?
You might apply for a property adjustment if you have struck a financial arrangement but are dissatisfied with the result once it has been finalised. Your application for the adjustment following divorce must be submitted within 12 months of the divorce’s finalisation. You will need to request special authorisation from the court if you do not submit your application within this window of time.
What takes place if the parties reach a property settlement agreement?
If the parties reach an amicable arrangement, typically through mediation or family dispute resolution, they may apply to the court for consent orders, which are formal written agreements that have the court’s approval.
Otherwise, they might create a legally binding financial agreement (BFA). This is a written document that outlines the property division terms. It might also cover other subjects like child support and spousal maintenance.
The Family Court has the authority to enforce both consent orders and BFAs. According to Australian family law, if one party violates the agreement, the other party may apply to the Family Court for enforcement.
What transpires if a property settlement is not reached by the parties?
You might need to ask the court for orders about how to divide the property if you and your partner are unable to come to an agreement on one. This will require a lengthy hearing and is typically more expensive, time-consuming, and upsetting. The conclusion of a hearing so that a court can reach a decision might take months or years.
Common Family Law Myths
“The mother always gets the kids.
A parent does not have “custody” or any other legal rights over their child in Australia.
A child is not legally required to reside with the mother and visit the father every other weekend and during half of the school breaks.
As long as it is in the child’s best interests, both parents should be able to have a meaningful relationship with their child (being the paramount consideration).
“I need to have a divorce in order to settle my property.”
There is no formal need that you go through a divorce or wait a full year following your separation before finalising your property division.
You can (and should) work to complete your property settlement as soon as you get divorced.
“All family law cases must be litigated in court.”
No. In Australia, only 5% of separated couples (married or de facto) actually go to trial. This is especially true for parenting cases, where it is now legally required that, barring certain exceptions, parents attend mediation before a request for parenting orders may be made.
95 percent of separated couples typically reach an agreement outside of court (which is far more commercially sensible and is far less stressful, uncertain and costly).
“We’ve since split up, thus she can’t inherit from me.”
Although it is crucial to take into account the value of the parties’ net assets as of their separation, a Court must first identify and value the parties’ assets, liabilities, and financial resources as of the date of the trial or final property settlement as part of a 4-step property settlement process (whichever occurs earlier). For instance, this could apply to any inheritances, gifts, or Gold Lotto winnings received after a divorce that comes in a lump sum.
“Since we still reside together, we cannot be split apart.”
Dissolution is possible “within the same roof.” You will need to demonstrate this, of course. For instance, sleeping in different bedrooms, clearly delineating household chores, paying payments, etc.
Contrary to popular assumption, it is typical for separated spouses in Australia to continue living together today for a variety of reasons, including children, finances, or convenience.
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