Property Settlement pt4 – How do courts split property after separation?
Let’s talk about what you need to know before you commence any property settlement discussions, and absolutely before you agree anything with your former partner as to how to divide your property between the two of you after you have separated.
So how do courts look at splitting property after a separation? Firstly, the court looks at the value of all the assets and liabilities of the parties as of the date of the court hearing. Deducting liabilities from assets will give the value of the “net pool of assets” of the parties. The court will also look at the value of each party’s superannuation entitlements.
The second step will be for the court to consider the value of the contributions made by each party at the commencement of the relationship, during the relationship, and after separation towards the acquisition and maintenance of their asset pool and to the welfare of their family. The court will consider both direct financial and non-financial contributions of each party, including contributions as a parent and homemaker.
Thirdly, the court will assess a wide range of other relevant factors, including disparity of income, future income earning capacity and the capital cost of caring for any children. The court will then arrive at a percentage split between the two parties. For example, the court may decide that at a split of 55% of the net asset pool to one party and 45% to the other is appropriate.
Lastly, the court will look again at that percentage split to ensure that it is a “just and equitable” outcome for the circumstances. Having ordered the split, it is normally left to the parties to allocate the matrimonial property between them to achieve that percentage split.
The method by which the court will determine the appropriate split of property between former partners is more than merely arithmetic. You should consult a lawyer before you even think about commencing a negotiation with your former partner.
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CAUTION: This article contains general information of public interest only and is not intended to be, nor should be relied upon as, legal advice specific to the reader’s personal circumstances. Should you have a legal matter, please seek professional advice before acting or relying on this content.