Many clients who come to see me about family law settlements are under the mistaken belief that the date that they separated from their partner is determinative of not only what assets are “included” in the asset pool, but also is determinative of when their respective contributions should be assessed.
In fact, usually the asset pool available for distribution is whatever assets (and liabilities) exist at the date the court deals with the matter. This is why it can be very important that separated people act promptly to finalise their property settlement after they separate.
Often, however, people fail to promptly act to finalise their property rights after separation. Sometimes it can be years after they have separated that they seek to finalise a property settlement.
In these sorts of cases, one factor that is commonly overlooked is that if one party has been primarily responsible for a child since separation, that is a substantial contribution that needs to be taken into account in determining who is entitled to what percentage of the property pool.
One example is a decision of the Family Court in Kashani, where the court considered a case where the parties had been separated for about 10 years before an application for property settlement was made. During that 10 year period, the child of the parties had lived with the father. The mother had paid no child support.
Whilst the Court found that up until the parties had separated, their respective contributions had been equal, because of the care of the child the Court found that after separation, the father had made a greater contribution. The Court accordingly made an adjustment in the father’s favour in the division of the parties’ assets.
Cases where there is a substantial delay between separation and finalisation of a property settlement present special challenges. Often, the asset pool is very substantially different when the matter is dealt with than what it was when the parties separated. As Kashani also demonstrates, often other contributions are quite different after separation than before separation. These factors all need to be assessed carefully to work out what a proper adjustment of parties’ property entitlements should be.