How are Assets Divided in a Divorce in Australia?

A common question on everyone’s mind is just how the assets are divided in a divorce in Australia.

At law, there is no 50-50 split rule, or strict mathematical formula to determine just how the assets are divided in a divorce in Australia. The asset split will in-fact depend on a wide variety of factors.

Entitlements Of The Stay-at-home Parent Versus The Breadwinner

A common concern of the stay-at-home parent is that since they did not make any financial contributions to the marriage, such as contributing to the payment of the mortgage and bills, that they are not entitled to an equal part of the settlement following divorce or separation.

This is not the case, the court in-fact considers the non-financial contributions of this parent, and places equal importance on the role to that of the primary breadwinner when determining just how assets are divided in a divorce in Australia.

The outcome of just how the asset pool will be divided is not set-in stone and may not be as simple as a 50-50 split. This is something decided on a case-by-case basis.

Factors Considered

Factor: The Assets And Liabilities Of Both Parties

Common Assets include:

• The family home
• Investment properties
• Savings
• Shares and stocks
• Mutual funds and bonds
• Superannuation
• Family trusts
• Cars and boats
• Personal property such as jewellery and collectables
• Household items (e.g furniture, televisions)
• Businesses interests

Common Liabilities include:

• Home mortgage
• Personal loans
• Car loans
• Credit card debt
• Business loans
• Hire-purchase agreements

Direct Financial Contributions: Assets Obtained Prior To Entering The Relationship & Accumulated During The Relationship

Sometimes a party may bring a prior owned property to the marriage. Determining how this property is shared or distributed depends on how the property is used, and how the other partner contributes to the property.

The interest of the partner bringing the property, or shared assets which have been obtained during the marriage are likely to be eroded the longer a couple has been together, and further by the other parties’ contributions to it. This means that essentially the longer a couple is together, the more the property belongs to the both of you. Therefore, the length of time a couple has been together will determine just How the assets are divided in a divorce in Australia.

Assets Obtained After Separation

There are two approaches for considering entitlements to property acquired after separation. Both of which are integral in determining how the assets are divided in a divorce in Australia.

The first contemplates how the property is utilized, and how the other spouse contributes to the property. The interest of the spouse owning the property may be balanced by the other party’s contribution and the asset will then be added to the asset pool.

The second approach looks at contributions after separation made by the non-owner spouse towards all matters concerning both parties.

I Won the Lotto! Do I have To Give My Ex Anything? 

Post separation windfalls such as lottery wins will generally be considered by the court when deciding upon property settlements and will on occasion be included in the property pool available for distribution.

The case of Farmer v Bramley (2000) involved a husband winning $5,000,000 in the lottery 20 months following separation. The parties involved had one child to the marriage who lived with the mother. The court decided that the wife was entitled to $750,000 as she cared for her husband during their marriage and cared for the child following their separation.

Farmer v Bramley perfectly illustrates the uncertain nature of just how assets are divided in a divorce in Australia. If you have concerns regarding whether your ex is entitled to a portion of any of the assets you obtained post separation, contact JB Solicitor’s today to obtain some legal advice.

The Length Of  The Relationship

There will be a significant difference in just how assets are divided in a divorce in Australia depending on how long a couple has been married. Even though one spouse may have made a significant amount of the financial contributions in the relationship, the passage of time erodes their contributions. This basically means that the longer one partner has been in their role as the stay-at-home spouse or parent, then their entitlement to the total asset pool is accordingly larger.

The Number Of Children And Who They Will Live With

A greater percentage of the asset pool is generally awarded for each child under the age of 18 in the primary care of one spouse, to that spouse.

The Future Needs Of A Party Such As Their Ability To Work And Their Health

• Any mental or physical disabilities
• The standard of living that both parties are accustomed to
• If one party will be the primary carer of the children
• Financial support whilst seeking further education or employment.

Types Of Non-Financial Contributions

• Taking care of the children while one partner is working.
• forgoing a prospective career or study – Generally the non-formal marital agreements commonly made in the typical household, that is – one spouse will be the primary breadwinner, and one will take care of the home and/or children.
• The upkeep of the home including:
• cooking, cleaning, gardening, making dinner and so forth.
• Any improvements made to the property:
• This can include any maintenance or renovations that either have increased the value of the property or have resulted in monetary savings on maintenance costs.
• The amount of work undertaken, and the value added to the property because of the work.

Spousal Maintenance 

What if after your relationship breakdown, you do not have the financial means to support yourself to a reasonable standard of living? What if you want to pursue study which you were holding off on because of your relationship? What if you are struggling to find work?

Spousal maintenance may be the answer to your problems until you can get back on your feet! This is essentially where your ex-partner makes support payments to you for these precise reasons.

Spousal Maintenance May Be Applicable when:

1. The respondent has the financial means to support the partner.
2. Must be awarded within 12 months of divorce OR 24 months of de-facto separation.

• financial support while pursuing education.
• financial support while seeking employment.

Section 75 of the Family Law Act (1975) provides an extensive list of matters to be considered when awarding spousal maintenance; these include:

• The age and health state of each parties
• Their income, property, and financial resources
• Their physical and mental capacity to obtain employment.
• Whether either party has the care or control of a child of the marriage under the age of 18
• Any commitments of each of the parties necessary to enable the party to support themselves, a child, or another person.
• The responsibilities of either party to support any other person.
• The eligibility of either party for a pension, allowance or benefit under the commonwealth, state, territory another country
• Any superannuation fund or scheme within or outside Australia
• To maintain a standard of living that is reasonable in the circumstances.
• The extent to which the payment of maintenance can aid the party to establish themselves by undertaking further education, employment, or training to obtain a sufficient income.
• The effect that a spousal maintenance order will have on the ability of either party to pay debts.
• The extent to which the party who will be receiving the maintenance has contributed to the income, earning capacity, property, and financial resources of the other party.
• The duration of the marriage, and the extent this has affected the earning capacity of the party to receive the maintenance.
• To enable a party to continue their role as a parent.
• Whether either party is cohabitating with another and the financial circumstances relating to that cohabitation
• Any child support that party to the marriage provided, provides or may be liable to provide in the future for a child of the marriage.
• Anything else the court may wish to take into consideration.
• Terms of any binding financial agreement on the parties to the marriage
• The terms of any order made under section 79; relating to:

The property of the parties or vested bankruptcy property in relation to a bankrupt party; and

• The terms of any order or declaration made, or proposed to be made in relation to either:
  1. A party to the marriage
  2. A person who is a party to a de facto relationship with a party to the marriage

OR;

the property of a person covered by either 1 or 2.

OR;

vested bankruptcy property in relation to a person covered by either 1 or 2.

Hire An Experienced Family Lawyer Today

Family law proceedings are difficult for all parties involved. If you need advice regarding a family law matter or would like additional information regarding how assets are divided in Australia, please contact our firm today.

Ph: 1300 287 911

More Questions About Family Law?

Find out more about Family Law matters by reading some of our other articles such as:

Are You Separated But Living In the Same House? Here’s How To Prove It 

Can I Change The Locks After Separation?