At the time you and your partner first think about entering into marriage or a de facto relationship, the last thing you will likely be considering is the potential division of your assets in the event of separation or divorce. Unfortunately, relationship breakdowns are very common, and couples often find themselves caught up in ugly battles over what they each believe to be fair distribution of property.
Many people believe that because they have spent a considerable period of their lives building assets together, that they will be divided on an ‘equal’ basis. Contrary to popular belief, however, this process isn’t as cut and dried as a fifty-fifty split. Instead, Courts will typically refer to the laws surrounding what is known as ‘equitable distribution’.
Defining Individually & Jointly Owned Assets
The process will begin by the Courts requesting the provision of a complete list of the assets owned by the spouses both individually and as a couple. This will involve the full disclosure of all of the assets collected both before and during the marriage or relationship. It might also even include a breakdown of how the assets were kept separate during the relationship. Assets can include real estate, investments, inheritances, superannuation funds, and bank accounts.
Should assets be clearly defined as independently owned by one spouse, it will sometimes be awarded back to them. However, any of the assets presented to the courts that cannot have a clear demonstration of being separate from the other spouse will be considered subject to equitable division and categorised as community property.
Making the Decision for Equitable Division of Property
In the occurrence of community property, the Courts will simply look on how to distribute these assets to each party in an equitable fashion. They do this by asking a range of questions, including:
- Was there a spouse who invested their time and sacrificed a career to raise children?
- Of the two spouses, who has the highest earning capacity?
- Are future needs going to be met for both spouses, such as cost of living increases, health care, and the costs associated with aging?
- Should children be involved, will one spouse be more financially responsible for them?
Together, the Courts will obtain and review this information in regard to the assets available, as well as combining each of the needs of the separating individuals (as well as any offspring), ultimately to make their final determination of division of assets. Each party will then be legally required to follow these determinations of the judge.
Speak with Us at Terry Johnson Legal to Learn More
If you would like more information surrounding the distribution of property during separation or divorce, or any other matters regarding family law, please contact us today at Terry Johnson Legal. Call (02) 6262 9376, send an email to terry@tjlegal.com.au, or leave your details on our online enquiry form.
