A common question leading up to divorce in Australia is who gets what?
The typical misconception couples separating, or getting divorced have is assuming that they simply keep everything that is ‘theirs’ or in their name, and then split whatever they jointly own. Due to disparities in how a couple’s wealth and assets are distributed, such a division can result in an extremely unfair outcome and as such is often not the case.
The purpose of this article is to provide some clarity upon the various reasons that help determine who gets what in a divorce in Australia.
Factors the court will consider in determining who gets what in divorce in Australia
1. Identify and value all of the property of the parties
2. Assess the contributions (financial and non-financial) of the parties
3. Identify the needs of the parties
4. Determining a just and equitable division of the assets
To begin, the court will firstly consider the assets and liabilities of both parties. The list below is by no means exhaustive, but merely an example of the types of assets and liabilities which will be identified, valued and considered.
- The family home
- Investment properties
- Shares and stocks
- Mutual funds and bonds
- Family trusts
- Cars and boats
- Personal property such as jewellery and collectables
- Household items (e.g furniture, televisions)
- Businesses interests
- Home mortgage
- Personal loans
- Car loans
- Credit card debt
- Business loans
- Hire-purchase agreements
Financial Contributions – Assets Obtained Before & 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 is an important factor to determine who gets what in a divorce in Australia.
Assets Obtained Post-Separation
There are two approaches for considering entitlements to property acquired after separation. Both of which are important in determining who gets what 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.
Non-Financial Contributions include
- 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 such as any maintenance or renovations that either have increased the value of the property or has resulted in monetary savings on maintenance costs.
- The amount of work undertaken, and the value-added to the property because of the work.
Identifying the Needs of Both Parties
The court will consider the current and future needs of both parties. The most important needs which commonly impact how property is split are typically factors such as your current and future ability to earn an income, health, age and whether you have to care for children.
Additional factors such as your access family, or a future inheritance may also be considered when calculating and balancing the division of the property pool.
Typically, the court will compare these factors concerning both parties and award an additional portion of the property pool to balance it out.
Determining A Just & Equitable Split
This is the fourth and final step to determining a property settlement.
Section 79(2) of the Family Law Act 1975 provides that the court shall not make an order unless it is satisfied that in all the circumstances of the case that it is “just and equitable” to make the order.
This step essentially involves the court standing back, and looking at the reality of the percentage division at which it has arrived to determine whether it is fair, or if any adjustments need to be made.
Importance of Seeking Legal Advice
It is important to note when discussing who gets what in a divorce in Australia, to obtain legal advice from an experienced family lawyer to obtain a clear understanding of your entitlements.
Here at JB Solicitors, we’ll make the process as pain-free as possible. We have fixed-fee pricing for family law, giving you a clear sense of the costs from the start and will be sure to help you out every step of the way. With years of experience under our belt, we pride ourselves on making each client’s family law experience as positive as possible.
Contact JB Solicitors today to speak with one of our friendly and experience family lawyers.
If you have any more questions about who gets what in a divorce in Australia, divorce in general, or any other family law matters check out some of our other informative articles: