For most people, court proceedings are a last resort with the majority of couples reaching an agreement by consent. At the first instance, our aim is to get you the best possible outcome through negotiation. This will eliminate expensive court costs, lengthy proceedings and the stress associated with any legal action.
Of course, reaching a workable agreement is not always possible and you may need court intervention. In these circumstances, your solicitor will assist you in preparing for court proceedings, whereby a judge will determine your property settlement. In coming to a decision, they will assess your settlement by way of a 4 step process:
Step 1 Determine the value of your asset pool
The first step is to identify all of your assets. This includes the house, car, furniture, jewellery and any other items you would consider of value. If you decide to take the matter to court it is essential that you openly and honestly disclose all assets. A failure to do so may result in the court favouring the other party.
You would also need to determine the extent of any liabilities such as mortgages, credit cards, tax liabilities or loans. Once you have done this, you should be able to ascertain your ‘net asset pool’ by deducting your total liabilities from your total assets.
Total Assets – Total Liabilities = Net Asset Pool
Step 2 Establish each party’s contribution
There is no exact formula used when dividing property as each case is unique. An automatic 50/50 split is unlikely as the court will need to assess all contributions made by each party. This will make sure the settlement is equitable. These are broken down into the following 2 categories:
These are monetary contributions made by either party before, during or after the relationship. They will often consist of:
- Wages and other career assets such as termination pay or long-service leave. Income generated after separation is usually not included
- Legal costs (known as notional property)
- Lottery wins
- Compensation payouts
- Assets each person brought into the relationship
If one accuses the other of wasting money during the relationship or after separation but before settlement, the court will also take this into account. It will generally only be considered waste if more than 10% of the wage has been spent on any of the following:
- Non-Financial contributions
In a property settlement, non-financial contributions hold just as much weight as those that are purely monetary. These contributions inadvertently add value to the net asset pool. Courts recognise them as important aspects of a property settlement. They will often include the following:
When valuing the homemaker contributions, the court will assess two elements in particular; whether domestic duties were carried out in a full-time or part-time capacity and if housekeeping assistance was used.
Courts view these contributions as significant investments that allow the other person to earn a wage and increase the family’s asset pool. A full-time homemaker and parent is likely to receive 50% of the net asset pool as the contributions made by both parties are of equal worth.
If one partner has carried out home improvements throughout the relationship, these will most likely be considered non-financial contributions that add value to the asset pool. In determining the value, a court will assess how much a professional would charge to carry out the work.
Step 3 Consider the future needs of each party
A court will then assess the future needs of each party. This will determine the approximate amount the parties require to ensure they are met. Primarily, it is important that both parties maintain a reasonable standard of living. Other relevant factors include:
- Current financial circumstances
- Eligibility for government benefits;
- Income and income earning capacity;
- Financial circumstances of a new partner;
- Parental responsibilities;
- Responsibilities as a carer;
- Marriage duration;
- Financial support of another person;
- Child support obligations;
- Financial agreement terms, if any
Step 4 Ensure the outcome is just and equitable
Finally, the court will consider the practical effect of the property division and determine whether it is just and equitable. That is, it must be fair to both parties. Only then will a court make a decision as to who will retain specific assets and liabilities.
We understand that dealing with financial matters during such an emotional time can be difficult and confusing. Whilst it may seem easier to resolve these issues as quickly as possible, you should also be aware that most property settlements are final. Prior to making any decisions, we suggest talking to one of our solicitors who will answer any questions you may have and advise you of the best options available.
Remaining in the Family Home
Whilst remaining in the family home can be difficult for a number of reasons, there are many advantages in doing so, especially when dealing with a property settlement. There would be a greater chance of you retaining control of the home after settlement if you have been in possession of the property since separation. If there are children involved, the court would also be more likely to ensure that they remain in familiar surroundings.
Case Assessment Conference
If you have been unable to reach an agreement, a property case assessment conference will be the first major event that you will attend in the Family Court. The registrar will conduct a conference who will answer any questions and make recommendations based on the facts put before them. The purpose of the conference is to provide the parties with an opportunity to negotiate and settle the case by agreement. It is important that you make a genuine effort to resolve the dispute to avoid any further court events.
If you cannot come to an agreement, the registrar will often order the parties to complete a financial questionnaire within 21 days after the conference. The registrar will provide directions as to where you must send the document.
The applicant must also prepare a balance sheet outlining all assets and liabilities. They must send this to the respondent within 28 days after the conference. The respondent will have an opportunity to respond, which may be to confirm or dispute the accuracy of the document.
The purpose of this document is to outline a person’s income, expenditure and liabilities. ‘Full and frank disclosure’ of your financial circumstances is essential when completing the questionnaire. If the case goes to court, this will also form the basis of your evidence. Importantly, you will need to submit the financial questionnaire within 21 days after the case assessment conference.
Property Conciliation Conference
A conciliation conference will usually take place after a case assessment conference if the parties cannot reach an agreement. The purpose is to attempt to resolve any financial disputes and potentially avoid a hearing. It is a requirement that both parties make a genuine effort to settle their dispute. It is compulsory for both parties to attend however, if safety is an issue, you will have the option of speaking to a conciliator separately.
If you are experiencing difficulties relating to a property settlement, Gleeson and Co Lawyers can help. We have extensive experience in Family Law and will offer sound advice and guidance based on your needs and personal circumstances.
Call us today on 9534 3002