It’s vital to be aware of these 5 important factors when looking into how assets are divided in a divorce Australia.
#1 Property Settlement is not only about the house
Division of property includes more than just a house. One of the things we hear from people when talking about property settlement is they don’t have any property. If you have a pair of shoes, you have some property. Your property includes everything from houses, cars, furniture, cash, jewelry, superannuation, all of that comes into the pot as does all your debts and you can’t just exclude those.
Remember property is not just a house, we do use that as a very broad term in family law circles but make sure you include every single one of your assets whether it’s in their name or whether it’s in yours.
#2 Time Limits on property settlement
In terms of time limits for property settlement, if you’re married, you can start and go through and divide your assets from any moment that you’ve separated all the way up to one year after you’ve gotten a divorce. You don’t have to get a divorce at all, you can stay married forever if you like, but if you’re going through a divorce, you can’t get a divorce unless you’ve been separated for one year and one day. Once you have that divorce certificate, it activates a time limit that you then have one year after that time to do your property settlement.
If, however, you are de facto, you have two years from the date of separation to have gone through and done your property settlement matter. So again, remember you can do it from the moment you actually walk out of the house if you want to, all the way up to two years after it; so don’t sit on your hands. As a tip, the faster and quicker you do it, the cleaner it becomes because your actual asset values are the same.
#3 What assets are included in divorce splitting assets?
The type of assets that are included are really simple: everything. Don’t care whose name it’s in, don’t care if it’s all in your name or all in the other party’s name, it all comes into the pot. By everything, we mean this: house, car, furniture, cash, jewelry, superannuation, shares, timeshare, it all comes into the pot plus your debts, mortgages, lines of credit, personal credit cards, tax debts, personal debts, hex debts, personal loans and car debts.
When we bring it into the pot, it all must get divided up, so if you think it’s alright not to tell your partner about the extra stash of 100 grand you’ve got under the bed. Guess what happens if they find out or if there’s evidence that comes to life that you actually haven’t put all of the assets into the property pool? The whole thing can be completely overturned. You can be up for some substantial legal costs with the matter being brought back. They could come back for a double dip and get more money off you, so include it all into the pot and then that way, you’re actually going through and dividing your property settlement properly in accordance with the family law act.
#4 Value date to divide assets in a divorce
What is the value date that you go by when dividing assets? Unfortunately, it is not the date of separation like a lot of people think. It’s actually the date as of the agreement. This is really important because for instance, if you’ve separated three years ago, your house price or the property price may have gone dramatically up in that time.
This means that the value of that property now might be like $500,000 more than what it was. If you’re wanting to buy it, you’re going to have to pay more to retain that house. It’s also important to understand this: your savings are not at the date of separation. If you’re a really great saver and you save every single penny, then understand that your savings are going to come in if it’s three years later in a property settlement. If the other side spends it all on gambling or holidays and things like that, then you don’t get the benefit of that, you are going to lose it because there’s no money there now.
It’s important you understand that the value is at the date of separation, which is why we always say it’s important to try and get your assets resolved and divided as close to the date of separation as possible. That way, it’s fair for everybody.
#5 Financial versus non-financial contributions in property settlement
When the court is working out how to divide your assets and what you’re entitled to, they actually go through and assess your financial contributions into a relationship versus non-financial. So financial contributions are simple, it’s anything you’ve ever brought into the relationship, anything you earned during the relationship or any gifts or inheritances you’ve received throughout the relationship.
They also look at non-financial contributions, so these are things like staying home raising children, doing the cooking and cleaning, doing house renovations, gardening, mowing or the bookwork in a business where you’re not getting paid. Basically, non-financial contributions are where you have contributed to a relationship, but you haven’t received a financial benefit as a result. Now it’s quite common that people come to us and say, “Well I’ve been earning a hundred thousand dollars a year, and she’s been sitting at home watching days of our lives forever” and they argue that comparative. This is what we like to call “the fat ass defense” and unfortunately, that actually doesn’t apply in the court.
If you’re looking at that as thinking because you’re contributing financially you’re going to get more, the answer is no, not necessarily at all. So, you’ve got to really balance those things out and that’s what the court will look at.
We hope that these are helpful and that going forward, you’ll have a better understanding of what you need to do with your own property settlement matter. Please contact us for legal assistance with property settlement or divorce and separation. We are here for you.