Parties separating should take a sensible approach when splitting their assets from the relationship.
In saying this, there is a framework under the Family Law Act which needs to be considered to ensure that the split is fair. It is important to obtain legal advice because what you think is a fair split may not be what is considered fair by the Court.
There are options to contract out of the fair requirement, however, the agreement still needs to be reasonable. You will need to obtain legal advice to determine the best way forward to document any agreement reached or whether you would like to proceed with the agreement reached once you have obtained legal advice.
At the simplest level, what is taken into consideration are as follows:
1. What do you and your former partner own and owe?
It is important that you understand what is included and what is the value of the items and debts.
2. What were the contributions of the parties at the commencement, during and post separation?
That is, what did each of the parties bring to the relationship, what happened during the relationship and what has happened post-separation?
There are a number of different matters that are considered at this stage including:
- What did each party contribute financially. This can be from direct financial contributions (i.e wages) or it could be indirect contributions (i.e. gifts from family)
- What non-financial contributions did each party make? Matters such as labour for renovations, particularly if it has results in an asset increasing in value, or working in the family business for no wages.
- What Homemaker contributions did each party make? This step involves things like performing duties in the home including yard work, cleaning and cooking.
- What happened with parenting duties? This step involves consideration of the caring arrangements for children, including day to day care and running around after the children.
3. Each parties’ future needs.
Future needs take into consideration including the parties earning capacity, financial resources, age, health, who is primarily caring for the children.
4. Whether the outcome is Just and Equitable
Each step above is considered and weighed up to determine what is a fair split to finalise the property relationship. The length of the relationship is also a factor that is considered.
It is important to obtain legal advice when separating to ensure that the agreement reached is fair.
You may not have considered all the relevant factors that are required to be considered and this could impact on what you or the other party should reach.
Farrawell Family Law are able to assist with ensuring all the relevant factors are considered in your family law property settlement matter to ensure that you can finalise your property relationship with your ex-partner and move forward with your life.