The general public usually assumes that the division of assets should be a 50/50 split between the parties who are separated and intend to finalise their financial relationship.
This is not always the case. The Federal Circuit Court and Family Court take into consideration various factors when determining a division of the matrimonial asset pool, which are as follows:-
1. The initial step would be to determine the net value of the matrimonial asset pool.
Whilst real estate is generally the most significant asset of the matrimonial asset pool, it is not the only asset. Other assets also include bank accounts, motor vehicles, real estate etc. Even personal items such as luxury handbags and jewellery, depending on the value, can be included, or a person’s share in a company, for example, a construction company.
Assets owned solely by a party, jointly with each other or even jointly with a third party are to be included.
The net value of the asset pool is to be determined. Therefore, liabilities, such as credit cards and finances secured over motor vehicles, are also taken into consideration. The total assets minus the total liabilities would equate to the net value.
Also, superannuation is also taken into consideration by the Courts. However, it is best that you seek legal advice from an experienced family lawyer in relation to the Superannuation Split.
2. Contributions made by each party throughout a marriage or de facto relationship are also taken into consideration.
These include financial contributions, such as one partner earning an income, and the non-financial contributions (or equitable contributions) made by a party in their capacity of a homemaker, such as caring for the children and carrying out the household chores.
3. Future Considerations.
The Court will also take into account future considerations, i.e. relevant future factors, including but not limited to:-
- Age and health of the parties;
- Income earning capacity of the parties; and
- Whether one party is to be the primary carer of the children.
4. Last of all, the Court has to determine whether the division is ‘just and equitable’.
This decision is at the discretion of the Court and simply put, should the Court think that making a division, even if it is agreed upon between the parties, is unfair and inequitable, it may make an adjustment to the ‘disadvantaged party’ which it determines to be fair.
Once the Court takes into consideration of all of the above (and more) and essentially ‘balances out’ all of the relevant factors, it can make orders that it deems to be within the parameters each party is entitled to. The purpose of the division of the matrimonial asset pool is to finalise and sever once and for all the financial relationship of the parties so that they can move on their own separate ways without any further connection between them in relation to property.
This article is general advice and does not take into account your personal circumstances. It would be prudent to obtain legal advice in relation to your particular circumstances.
Our Firm is holding a legal workshop on 15 and 16 March 2019 and we will be discussing various issues including this topic and the best thing – it’s for free! Hence register your interest now by clicking here.