A couple of weeks ago we started to debunk a common separation myth – the 50/50 property split. Many people believe that the property pool must be divided in a 50/50 split regardless of any personal circumstances. This just isn’t true, and while there are no hard and fast rules the Family Law Act does set out a 4 step process for determining how a property pool should be divided. Those 4 steps are:
- Identifying the property pool;
- Considering the ‘contributions’ of the parties;
- Considering the ‘future needs’ of the parties;
- Deciding on a fair division based on the circumstances.
Section 75(2) of the Act lists additional factors to consider when dividing assets. These factors are predominantly concerned with the current and future needs of each party. Consider:-
- Where one partner has care of the children, whether his or her related needs met?
- How any income earning disparity affects the parties’ current and future needs;
- What each party needs to ensure a reasonable standard of living;
- The age and state of health of each party;
- The ability of each party to support himself or herself;
- The physical and mental capacity of each party to maintain employment;
- The income, property and financial resources of each of the parties;
- The responsibilities of each person to provide for any dependents;
- Whether maintenance would increase a party’s earning capacity by enabling him or her to undertake education or training or establish him/herself in a business or the workforce;
- The duration of the marriage and the extent to which it has affected the earning capacity of a party whose maintenance is under consideration;
- The need to protect someone who wishes to continue their role as a parent;
- The desire to keep the family residence so as to provide a degree of stability for the children;
- If either person is cohabitating with someone else, the financial circumstances relating to the cohabitation;
- Any child support a person has provided, or is required to pay or might be liable to pay;
- Any other relevant facts or circumstances.
Are there any other relevant factors that will assist you to reach a fair and mutually acceptable outcome?
An example from Real Life.
Suzy and Martin have separated and are in the process of negotiating a property division. Suzy is not currently employed as she has been the primary carer of their two children, Mila (3) and Sunny (2). She dedicates most of her time and resources to Sunny, who has an autism diagnosis and requires particular health, living and educational support which Suzy provides.
In this case, the property division should take into account the future needs of Suzy. Suzy’s responsibility to care for the children including a child with special needs; the fact that Suzy is not earning an income while she is undertaking this role; the need to protect Suzy and allow her to continue in her role as carer; and a standard of living that is reasonable in the circumstances.
Our Next post will cover the 4th Step – Reaching a fair agreement