What is a divorce settlement? What is a 70/30 divorce settlement split in Australia? Does this happen often? Firstly, a divorce or divorce property settlement is the distribution of assets between two parties after a divorce or de facto separation. It depends on financial circumstances of each party.
People may also use the terms division of assets to refer to a divorce settlement. As the name suggests, a 70/30 divorce settlement means that one party receives 70 per cent of the assets, with the other party receiving 30 per cent from the pool.
In the Family Law Act (1975), Section 79 gives the powers to court to determine how assets must be divided between two parties. Generally, parties are able to determine these matters by themselves with the help of legal professionals.
They must only approach family courts as the last resort. You can also read our blog about Section 79 of the Family Law Act here.
What Is a 70/30 Divorce Family Law Property Settlement?
Many wonder if it is possible for one party to get 70 per cent of the financial assets and the other party gets only 30 per cent. The confusion arises because parties always assume that everything is split equally. In reality, not all couples get a 50/50 split of their assets and property after they separate.
This is because in Australian family law, we consider the financial and non-financial contributions of each party. Once we consider the contributions, we have to come up with a fair, just and equitable property settlement.
Therefore, given individual circumstances, if 70/30 divorce settlement is fair and just, then it is quite possible for parties to go ahead with this 70/30 divorce settlement.
But, it is important to note that courts may only rarely approve a 70/30 divorce settlement because one party will receive a significantly less proportion than the other. As mentioned, it is most important for the division of assets to be fair, just and equitable. A 70/30 divorce settlement split can severely disadvantage one party because of the significant difference in proportions.
When Does 70/30 Divorce Settlement Occur?
Although it is rare, it can occur in some unique circumstances. Consider the following scenarios where Judy and Ryan were married with 2 children. Let’s suppose that during the marriage, the couple decides that Judy is to stay at home and look after the 2 young children, while Ryan is to be the sole earner.
This means that Ryan made financial contributions to the family in the form of his earnings and wages. On the other hand, by forgoing her career and looking after the two young children every day, Judy has made significant non-financial contributions.
Therefore, we can consider that both parties made equal contributions. Now, in this case, let’s consider that the two parties separated amicably. They have an equal shared custody arrangement where each parent has significant responsibilities towards both children.
If this is the case, then the parties may get a 50/50 split of all financial assets from the property pool. On the other hand, let’s also consider a scenario where the couples split amicably but Judy becomes the primary caretaker of both the children.
If this happens, given the fact that Judy is looking after both the kids and she does not have any employment currently because of these obligations, it is entirely possible that they agree for a 70/30 divorce settlement or a 60/40 divorce settlement where Judy obtains a higher percentage of assets.
Considering Future Needs
To consider future needs and future earning capacity of involved parties, or to make adjustments to property settlement orders, there are some factors that the court can consider. These factors are listed in Section 75 (2) of the Family Law Act. Some of these factors include:
- Age and physical health of all involved parties;
- Commitment of each party in relation to supporting either themselves or another dependent party such as the child;
- Physical and mental capacity of parties to obtain gainful employment in the future;
- If any party is liable to pay child support payments in the future
- Special circumstances or facts that the court must consider
- The extent to which a party has made contributions to the income, financial resources, property and earning capacity of the other party.
To check the full list of factors read the article published here. These factors are extremely important as it ensures that the property settlement will be fair, just and equitable.
Steps to Division of Assets
There is a 5-step approached that courts use to determine division of assets after a divorce or separation. It starts with identifying the assets. This can include financial resources such as savings and property.
Now, it is possible for parties to come up with their own division of assets with the help of lawyers. If they are able to have a healthy and amicable discussion, they can finalise their own property settlement matters.
Moreover, if parties have Binding Financial Agreements, they can simply follow what they decided in those agreements.
If parties are unable to do so, the court will then identify the asset pool, evaluate existing arrangements, assess the financial and non-financial contributions, estimate future needs of each party and then make orders that are just and equitable.
Seeking Legal Advice from Family Lawyers
Family lawyers can help you sort out your agreements and division of assets. We can help parties prepare a binding financial agreement. We have years of experience that enables us to assist all parties to reach amicable decisions. If required, our family law solicitor can represent you in the family court.
At JB Solicitors, our team of family law solicitors have been practising law for many years. They offer market-leading legal advice to resolve all matters. Our firm also offers family dispute resolution services such as mediation to help divorced or separated parties to reach mutual agreements.
For more information on any issue in family law, property law, immigration law, criminal law, commercial law or employment law, click on this link to be directed to our blog page.
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