“What happens to assets after separation”

People going through separation often query why assets they acquired after the relationship ended should be taken into account in the division of their property.

What is “Property?” 

The Court’s power to divide property extends to all of the property of the parties to the relationship, regardless of when or how it was acquired or in whose name it is held.

The term “property” in the family law jurisdiction has a very wide meaning, and can include property brought to the relationship by either party such as a house, cars, a business interest, gifts or inheritances, and can extend to property held by an entity that is an alter ego of one of the spouses.

Superannuation is treated as property in family law proceedings, but it is dealt with differently to other assets because of the different requirements of superannuation interests.

Contributions

In weighing up the best way to divide the assets, the Court must assess the financial and non-financial contributions made by each of the parties to the property. This is particularly relevant for assets that have come into existence after separation.

What this means is that the Court will take into account the financial contributions made towards the assets such as direct payments made to the purchase of assets and how income is applied during the relationship. The non-financial contributions are also considered, and particularly so in longer relationships where such contributions as homemaker and parent have been carried out for many years.

The Courts generally regard marriage as an economic partnership and are loath to apply a mathematical approach when dividing property, except in very short marriages.

Inheritance

In one example, the Family Court looked at the situation of an inheritance received by one of the parties after separation and concluded that because there were other assets available to ensure each party received a fair settlement, the inheritance was not included in the pool of the property that was being divided by the Court and the party who received the inheritance retained it. However, each case needs to be considered on its individual facts.

Time Limits

Property matters for married couples must be commenced in a Court within 12 months of obtaining a divorce order, or within two years of separation for de facto couples.

The process of separation can be an emotional rollercoaster, particularly when trying to negotiate the division of joint property.

One of the biggest causes of stress can be not knowing how things will be divided and the uncertainty about the future. Seeking advice may help you to understand the process.

If you would like further information please contact Andrew Crooke or a member of our Family Law Team on 07 4616 9898.

 

Prepared by Andrew Crooke

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