Divorces and separations are hard. But when they happen, you will also want to know how much you will receive from the divorce property settlement.
Under the Family Law Act 1975, the Courts have the power to make changes to the property interests of the parties if it is just and equitable to do so.
When making this order, the Courts need to consider several important facts. It is necessary to determine the parties’ respective contributions to the property, as well as their future needs and other factors. Both financial and non-financial contributions to the property made by each party should be looked at.
Another important aspect is ensuring the security of the welfare of the family. Any children of the relationship also need to be taken care of.
Due to these reasons, a divorce property settlement can be very difficult.
When it comes to financial contributions of each party, the process of checking can be time-consuming, but if there is a clean money trail to follow, it is easy to calculate the value of the contributions.
On the other hand, non-financial contributions to the property is where many difficulties lie. In valuing a non-financial contribution, the court will most likely place the cost of the work as if it has been done by another person who charges for the work.
For example, if you built a deck yourself, you should get a professionals’ quote to estimate how much money was saved, and how much the new deck increased the value of the property in question.
Withstand Lawyers have a vast experience in estimating how much money you will get after you separate from your spouse or partner.
Knowing this figure may help you better negotiate figures with your ex-partner, and thus help prevent you from going through the expensive legal process.
When making a determination for a divorce property settlement, the court follows a 4-step approach.
Step 1: Establish the Asset Pool
Both parties will need to be evaluated financially: they will need to go through their financial records to determine their worth.
This means disclosing evidence of individual bank accounts, the value of properties the parties own, the value of shares that parties own, and any interests the parties may have in a trust, company or a business.
Apart from assets, any debts or money owed to banks, the Government or any other person or entity should also be disclosed.
Step 2: What Contributions Were Made During the Relationship
As discussed previously, this will include both financial and non-financial contributions. Financial contributions relate to wages, any gifts or inheritances received, government payments, etc.
On the other hand, non-financial contributions relate to doing housework, looking after the children of the relationship, doing any renovations, etc.
Put simply, contributions can include anything that helped maintain the family, the house, and the relationship.
Step 3: What the Future Needs of the Parties Are
After having decided on the respective shares of property, based on the above contributions, the court will make an ‘adjustment’.
The adjustment will take into account various factors, including the future needs of both parties. This includes their predicted earning capacity in the future, their health, ages, employment prospect and financial resources, responsibility for the care of children post-separation, the duration of the marriage, as well as the extent to which it has affected the predicted future earning capacity of both parties.
It is possible that one of the parties has different living requirements to the other, and needs to have specific finances to maintain his or her health, or a certain standard of living.
As shown above, there are many largely prospective factors to be considered when determined what each party is likely to need, and what each is able to pay to support the other.
Step 4: Is the Decision Fair and Equitable?
It is important that the decision of the court will be fair and equitable to both parties. This is what the court looks at with special attention. Bearing this in mind, the court will decide on whether or not you keep certain assets, or if they are to go to the other party.
When it comes to financial circumstances and the income earning potential post-separation, women with dependent children can be at a considerable disadvantage in comparison to men.
Especially single mothers and older women living alone post-separation are likely to experience a drastic fall in living standards.
Because of this, and because they have a significantly less earning capacity, the court may require that they have a higher adjustment.
When the court makes an order of how much each party should get, it is up to the parties to make decisions about how they would like to receive the funds and what they would be happy with.
Should they fail to reach an agreement, the court will make the decision for them.
Determining how much each party should get following the separation or divorce can be a difficult and unpleasant process. Our team of experienced family lawyers has had the opportunity to deal with a wide range of intricate cases, and learn how to build evidence in support of our clients. Withstand Lawyers are known for overcoming the legal challenges of their clients and achieving the best outcome for them.