Thanks to television programs and movies many people going through divorce believe that a property settlement means automatically ‘losing half of everything’ or the ‘lot’.
The danger with relying on this sort of anecdotal evidence is assuming that the outcome is the same in all property settlement situations – when in fact, everybody’s circumstances are completely different, even if on the face of it there appears to be many similarities.
There is a particular formula that the Courts have developed when assessing what a particular person’s entitlements may be in a property settlement known as the ‘four step approach’. Family lawyers can advise clients on the likely outcome of a property settlement by referring to the formula and their own experience with it.
- Assets and Liabilities. This is the most obvious step – what exactly are we dividing? The Court considers the real property and its value, vehicles, boats, businesses/companies, jewellery, savings, Superannuation entitlements as well as mortgages, loans, credit cards, and the like at the time of commencing the property settlement. This becomes the ‘property pool’ and is what is up for division amongst the parties.
- Contributions. Once the property pool has been ascertained, the court then takes into account the contributions both parties have made at the commencement of the relationship, throughout the relationship, and since the parties had separated. This can include any property that either party brought into the relationship, who took care of the children (if any) and took on domestic duties, whether any gifts or inheritances were received, and who is continuing to make mortgage repayments and the like since separation had occurred.
- Future Needs. The Court then must consider the future needs of each party, such as health needs, income earning capacity, who has care of the children and whether those children have special needs.
- Just and Equitable. After considering points 2 and 3, the Court then considers what would be the most just and equitable outcome for both parties by deciding what percentage of the property pool each party should retain and the assets and liabilities are then split according to those percentages.
If you want any further information about family law matters, or think that we might be able to assist you with the legal aspect of a marital breakdown, please contact us to speak with a Townsville Family Lawyer on 07 4724 1016 or [email protected].