Fair doesn’t mean 50/50

by | Mar 9, 2018 | Information, Property Agreements | 0 comments

Property Settlements

One of the problems that people often have when it comes to dividing up assets following a relationship breakdown is deciding what is fair. Fair doesn’t mean 50/50.

Often the person who contributed more financially thinks that by offering 50/50 they are being more than fair, in fact they feel that they are being extremely generous.

After all they were the one who worked hard and brought in most of the money. Right?

Generally no. An equitable distribution will often not be a 50/50 split.

Spousal Maintenance

The other big problem is regarding spousal maintenance.

Often the person who has been bringing in most of the money into the household thinks that once the decision to split up has been reached they no longer have a financial responsibility to their spouse.

If you’re not living in the house, especially if your removal from the house was by the police or a Family Violence Order, then you shouldn’t have to give any money to your spouse. Right?

Generally no. There is a right to maintenance in certain situations.

The Family Law Act 1975

The Family Law Act is the law that applies to most of Australia with the exception of Western Australia. Even in Western Australia a lot of their laws are identical to the rest of the country although there are differences for de facto couples especially so make sure you are getting the right advice if you are in WA.

Part 8 of the Family Law Act establishes the rules for property settlements and spousal maintenance.

Maintaining your spouse

SubSection 72 says specifically

(1) a party to a marriage is liable to maintain the other party, to the extent that the first-mentioned party is reasonably able to do so, if, and only if, that other party is unable to support herself or himself adequately whether:

(a) by reason of having the care and control of a child of the marriage who has not attained the age of 18 years;

(b) by reason of age or physical or mental incapacity for appropriate gainful employment; or

(c) for any other adequate reason; having regard to relevant matters in subsection 75(2)

In other words if you spouse can’t reasonably work because of child care or other causes and you can afford to provide them with money to help them the court thinks that you should.

If you or your spouse are in a situation where you or they are struggling financially following separation there may be some obligations to help.

Subsection 80 talks about the general powers of the court when it comes to spousal maintenance orders.

To paraphrase the subsection. The court can order payment of a lump sum, either in one amount or in installments, order payment of weekly, monthly, yearly or other periodic amount, order the transfer or settlement of property, appoint or remove trustees and order payments to be made and impose terms and conditions that it thinks are appropriate.

Dividing your property

There is no exact formula used to divide your property. No one can tell you exactly what orders a judge will make.

A word on legal advice.

When you speak with a lawyer to get legal advice a reputable lawyer will tell you the likely range that your property settlement will come in based on your unique family situation.

They can not give you this information in a “free 30 minute” legal advice session. Those sessions are to check you out and see if you have enough money to be a suitable client for their firm.

You wouldn’t expect to go to any other professional for their advice and not pay them anything. Legal advice is the same. Unless you are eligible for legal aid or other support don’t expect to go to a lawyer who works for free and get good quality legal advice.

Interact Support has a growing number of Family Lawyers who have agreed to a discounted Legal Advice and Strategy Session for our clients. These sessions are 90 minutes long and we help you to prepare by completing an Interact Support Client File before you go to see the lawyer.  Find a lawyer.

In court a Judge decides what is just and equitable based on the unique facts of your case.

In mediation what a court would decide provides a background range that helps you to negotiate a property distribution that is “just and equitable” based on your family situation but in a way that puts you much more in control of the process and at a much lower cost.

The Family Law Act 1975 sets out the general principles the court considers when deciding financial disputes after the breakdown of a marriage (see Sections 79(4)and 75(2)) or a de facto relationship (see Sections 90SM(4) and 90SF(3)). The general principles are the same, regardless of whether the parties were in a marriage or a de facto relationship, and are based on:

  • working out what you’ve got and what you owe, that is your assets and debts and what they are worth
  • looking at the direct financial contributions by each party to the marriage or de facto relationship such as wage and salary earnings
  • looking at indirect financial contributions by each party such as gifts and inheritances from families
  • looking at the non-financial contributions to the marriage or de facto relationship such as caring for children and homemaking, and
  • future requirements – a court will take into account things like age, health, financial resources, care of children and ability to earn.

The way your assets and debts will be shared between you will depend on the individual circumstances of your family. Your settlement will probably be different from others you may have heard about and unlikely to be a simple 50/50 split.  If there are children and the issues related to their care, a health issue or other factors that mean that future requirement will be different then the share of the asset pool will usually be greater for the person with the greater future needs.

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