Are you ever prepared for dividing assets after separation?
While we may dream of a life of marital and domestic bliss, things don’t always go according to plan.
Separation and divorce are facts of life. In fact, ABS data shows that in 2021 there was one divorce for every 1.6 marriages. So, if you are considering separation – firstly, please know that you’re not alone!
It can be a difficult time, both emotionally and legally, with many critical things to navigate – such as the division of assets. However, with some careful research and planning – along with an experienced family lawyer in your corner – you can navigate this troubled time successfully.
Finding a Lawyer
Family law is a complex area that encompasses parenting matters, property settlement, domestic violence, dispute resolution and litigation, surrogacy, binding financial agreements, prenups, and more.
Many people have never had to deal with a lawyer until they separate, so it can be a nerve-wracking experience. By choosing a family lawyer experienced in separation and divorce, based on recommendations and reviews, you can have peace of mind that you are in good hands.
Thinking About Separating? Take these First Steps
- As soon as you decide to separate, speak to a lawyer specialising in separation and divorce issues. They’ll guide you, offer sound advice, and help you understand the process.
- Seek support from family, friends, or a mental health professional as needed to help you deal with your emotions.
- If you are a parent, it’s mandatory under Australian family law for you to attempt Family Dispute Resolution before applying for parenting orders (this is not the case for couples).
- Work with your ex-partner to reach an agreement about finances, property, and parenting. The ideal scenario would be to negotiate a settlement, rather than have to go to court – which is an expensive and time-consuming endeavour. It’s important to formally finalise these agreements to prevent future claims or misunderstanding.
The 4 Step Process to Determine Division of Assets After Separation
When it comes to dividing your assets, the steps involved are:
Identify and value your assets, liabilities, and resources
List and evaluate all assets, liabilities, and resources held by both parties. This includes properties, investments, savings, vehicles, businesses, superannuation, debts, and any other financial holdings. You may need valuation experts to help determine the precise value of certain assets – especially if there are disagreements or complex financial structures involved.
Consider the contributions of the parties made through the relationship
Consider financial contributions such as income, inheritance, or property acquisition, along with non-financial contributions like caregiving, homemaking, and support for a partner’s career advancement. The duration of the relationship and the roles each party played in maintaining the household and raising children are also taken into account.
The goal here is to recognise and fairly attribute the efforts and sacrifices made by each party during the course of the relationship.
Consider the future needs of each party
When it comes to assessing future needs, factors such as age, health, earning capacity, childcare responsibilities, and financial resources are considered. For instance, a spouse with limited earning potential or health issues may require additional financial support to maintain a reasonable standard of living.
Similarly, arrangements concerning the care of children, including their educational and healthcare needs, are factored into the decision-making process. The aim is to achieve a balance that enables both parties to move forward with financial stability and independence.
Determine whether the proposed settlement is just and equitable
The court then examines whether the division of assets is fair and reasonable in light of all the circumstances surrounding the separation. This includes assessing the financial and non-financial contributions of each party, their future needs, the welfare of any children involved, and any other relevant factors.
If the proposed settlement aligns with these principles, it is deemed just and equitable, providing closure to the asset division process.
Dividing assets after separation can be a tricky process. However, seeking professional legal advice and engaging in open communication can help facilitate smoother negotiations and ultimately lead to being able to close this chapter of your life for good so you can get on with the next.
