Dividing up your money
When couples separate, it is very, very important that they finalise their financial matters in a legally binding way.
To work out what your entitlements are involves what is, in essence, a four step process.
The first step is to work out what your assets and liabilities are (whether they are in your name or in joint names or in the name of a company or trust does not really matter) right now. Not the date you separated, but right now, which may be months or years after you actually separated.
That sounds fairly straightforward, but it can be complicated by not knowing what your financial circumstances are, for example, if there are assets that might need to be valued, or if your partner won’t tell you what they have. In either of those cases, I can help you get the information that you need.
The second step is to analyse what you and your ex – partner’s respective contributions were to building up your assets from the commencement of your relationship until right now (noting that “right now” can be months or years after you have separated). It is important to understand that “contributions” in a family law sense include not only financial contributions, but also non-financial contributions.
For example, it is a financial contribution to go to work and earn money, or to have owned assets before you got together. It is a non-financial contribution to look after children, mow the lawn, or to improve your home. There is absolutely no presumption that financial contributions are any more important than non-financial contributions. All of these contributions have to be weighed up, and then generally expressed as a percentage.
The third step is to have a look at the future, and consider your and your ex – partner’s needs for a share of the assets. Your respective needs are often not equal. Maybe one of you has a much greater earning capacity than the other. Maybe one of you will be primarily responsible for looking after young children. All of these factors need to be considered, and often result in an adjustment from the contribution based assessment made at the second step.
Having worked out all that, the final step is to step back and look at the overall result and make sure that it is fair.
That sounds simple, doesn’t it? However, as with everything else in family law, it is not a science – it is an art. When I talk to you about these matters, I will take detailed instructions as to the history of your relationship and where you see yourself heading. With 30 years’ of experience, I am then able to give you an accurate assessment of what proportion of the overall asset pool you are entitled to.
These days, superannuation is increasingly important. Superannuation is regarded under the Family Law Act as just a different sort of asset. There are special considerations about superannuation in terms of the form that it is in, and when it will become available to the parties.
You also have to be careful about making sure that you understand the correct valuation of superannuation. However, generally speaking, superannuation is just another asset, and is also available to be divided between you and your ex-partner as any other asset is.
Having worked out what percentage of the asset pool you are entitled to, what do you do next?
It may be surprising, but most parties end up in broad agreement about who gets which assets. For example, one party will want the Ford car, and the other party will want the Holden car. One party will want the house, the other party will not.
Accordingly, it is not necessary for people to conduct a fire sale of everything they own and then divide the proceeds. Usually, the assets are divided up between the parties, and then there is a cash adjustment between them to arrive at the correct percentage result.
If that sounds complex, don’t worry – when you come to see me about dividing up your money, I will model all of this up on a computer program to show you. I will clearly show you what you will end up getting, and what you will not.
Also, I will show you different options if you are uncertain about which way to proceed and give you advice about what is the best way for you to move forward. Often, my clients say to me that they are surprised how clear all of this becomes with the benefit of some simple technology and a plain English explanation.
Having received all this advice, my clients are then often able to talk to their ex-partner and reach an agreement, or alternatively, have me write to their ex-partner and negotiate an agreement.
If an agreement is reached, it is really important that it is then formalised properly. This is one of the most important things for you to take note of. Failure to formalise a property agreement correctly can result in future claims being made against you, both by your ex-partner or creditors, difficulties in enforcing your agreement, and the imposition of stamp duty which you could have avoided.
Formalising your agreement is one of the most important parts of the work that I will do for you – this is specialised work that absolutely must be done properly.
Sometimes, however, even with the best endeavours, agreement cannot be reached between you and your ex-partner about your property. If that happens, I can take the matter to court for you. Of all the property applications that are made to the court, there are only about 1% that actually go all the way to a hearing in front of a judge. 99% of these sorts of property disputes end up being settled during the court process, often, quite quickly. It is sometimes just necessary, however, to start a court case to get your ex-partner to get serious about finalising your financial relationship.
If you do end up being in the 1% of people who go all the way to a defended hearing before a judge, I will act for you in court. I am both a barrister and solicitor, and am just as comfortable appearing in court as talking to you in my office. This saves you the cost of engaging a barrister if you do have to go to court.
So take heart, if your ex-partner is being completely unreasonable, or refusing to be honest about their assets, there are things that I can do to help you through the court system to sort it out, often very quickly.
If you need assistance contact me at [email protected] or call one of my offices for a no obligation discussion and for expert legal advice.