When Family Law solicitors first meet with clients who have separated and need to divide their assets, one of the most common statements we hear is that the wife automatically gets the house, or that the other party has already obtained legal advice and they are entitled to 90% of the property pool.
This cannot be further from the truth and is one of the reasons why it is important that you obtain proper legal advice from a Family Law solicitor before finalising any agreements about how to divide your property.
There are many different factors that the Family Court or Federal Circuit Court will look at in determining how to divide the assets and liabilities of a relationship. This is done by way of a four (4) step process which is:
- Identify the assets and liabilities available for division, regardless of whose name they are in;
- assess the contributions of the parties, both financially and non-financially (which includes any gifts, inheritances, windfalls and contributions towards the raising of children);
- look at the future needs of the parties, including income earning capacity, age and care of children amongst many other factors; and
- determine how to distribute the assets so it is just and equitable.
When looking at all of the factors, the law provides for the Courts to have discretion as to how much weight or significance placed upon any given factor. Due to this, when speaking with a Family Law solicitor, you will often hear them comment that your entitlement falls within a particular range of percentages. There are no “rules” as to how the assets are to be divided and as such, in addition to negotiating how much each party is to receive, negotiations in a property settlement also focus on how the assets are to be divided. For example, one person may want their entitlement to be paid out in cash, while the other party may want to pay them by way of cash and a superannuation split.
The other big issue arises when one party has an unrealistic expectation as to their entitlements. Often this is a result of internet forums and gossip, however unfortunately can also be the result of speaking with a solicitor who does not understand the complexities of family law. If a party thinks they are entitled to significantly more than they are in reality, this often hinders any negotiations and means that the matter needs to be litigated before the Courts which is not a cheap exercise.
If you and your spouse/de facto partner are separating, speak to one of our Family Law experts. They can give you advice as to your entitlements as well as assisting you in negotiating a settlement and then documenting any agreement reached in the appropriate format to make it binding.