What happens if people can’t agree on how to divide property when they separate?
If it isn’t possible to agree on how to divide property when you separate, then it may be necessary to seek advice from a lawyer about how to achieve a positive outcome.
When you approach a lawyer about property settlement disputes, there is a process we go through to help consider intangible as well as tangible factors.
Firstly, it is important to consider whether it’s just and equitable to make any adjustments to the property held in either party’s name.
Often this is the case, particularly if there are jointly owned assets that require transfer or resolution – but sometimes not.
It is then necessary to work out what is being divided – which in simple terms, means that you need to agree and create an assets and liabilities schedule.
What items are included in the Assets & Liabilities?
Pretty much anything that is registered in either party’s name or in their joint names. This will include partial ownership of bank account balances, property that is shared with extended family members, as well as overseas assets.
With regards to assets, the usual items include homes, investment properties, furniture and chattels, cars, bank account balances, shares and investments, the value of corporate interests, and superannuation.
In more complex cases, developing an agreed assets and liabilities schedule can be difficult, particularly if it’s hard to place a value on a parties interest in a company or a family trust.
What happens after you have an Assets & Liabilities schedule?
We then consider what is called Contributions. In this stage, we consider the assets and liabilities that each party brought into the relationship as well as contributions made during the relationship. We look at financial and non-financial contributions.
Some examples of financial contributions include received inheritances, insurance payouts, redundancy payments or substantial financial gifts made on behalf of one of the parties, by, for example, an extended family member.
Some examples of non-financial contributions include homemaking and child-caring responsibilities, or substantial renovations works conducted by one party which have improved the value of property.
The Family Court generally equate income earning capacity with homemaking and child-caring responsibilities unless there are specific circumstances that suggest otherwise.
Is that the end of the process?
At this point, we stop looking backwards into the relationship and start looking into the future at what we call “future needs factors”.
This includes considering whether it’s necessary to provide adjustments to either party for factors that relate to events in the future.
Some of the many factors that are considered include the age of the parties, diagnosed health issues, income earning capacity, and care of children.
For example, in circumstances where one of the parties has been diagnosed with a mental and/or physical health issue, we look at whether they are required to pay for treatment or surgery in the future, and whether their diagnosis affects their ability to earn income.
If in doubt, get in contact with us on (08) 9443 1111 and find how we can make your property settlement a smoother experience.