Divorce Property Settlement – How Much Will I Get?
How Much Will I Get From Divorce Property Settlement?
When you separate, you will want to know how much you will receive from your divorce property settlement.
The aim of this article is to provide an insight into the way in which Australian Courts divide property between a couple when they separate or divorce.
We also explain how financial and non-financial contributions are assessed as specified by the Family Law Act.
Under the Family Law Act 1975, the Courts have the power to make changes to parties’ property interests if it is satisfied that it is just and equitable to do so.
When making this order, the Courts need to consider the parties’ respective contributions to the property and other factors including their future needs.
The Courts are required to look at the financial and non-financial contributions made by each party to the property.
They also need to ensure that the welfare of the family is secure, and any children of the relationship are taken care of.
This is what makes a divorce property settlement difficult.
Checking the financial contributions that each party has made can be tedious and time-consuming, however, if there is a clean money trail, it is easy to calculate the dollar value of the contributions.
With non-financial contributions, there are many difficulties involved in placing a monetary value on the contributions made.
In valuing a non-financial contribution, the court will place the cost of the work as if another person had done it.
For example, if you fixed the fence of the matrimonial home, then you should get a quote to estimate how money was saved, and also how much the new fence increased the value of the property.
With our experience in Family Law and Property Settlements, we have developed an amazing way to estimate what you will end up in your pocket after you separate from your partner.
Knowing the figure may help you better negotiate figures with your ex-partner and help prevent you from going through the expensive legal process.
The court follows a 4 step approach when making a determination for a divorce property settlement between separated couples.
Both parties will need to go through their financial records and see how much they are worth.
This means disclosing what is in your individual bank accounts, the value of properties that you own, the value of shares that you own, any interests you may have in a trust, business or company.
You will also need to confirm the combined value of all of your debts or the money you owe to banks, the Government or any other person or entity.
PART B – What Contributions Were Made During The Relationship
This includes financial or non-financial contributions. Financial contributions can include wages, government payments, any gifts or inheritances received.
Non-financial contributions include doing housework, looking after the children of the relationship and renovating the house.
Basically, it can include anything that helped maintain the house, the family and the relationship.
PART C – What Are the Future Needs Of The Parties
After deciding on the respective shares of property based on the above contributions, the court then makes what is called an ‘adjustment.’
The adjustment takes into account factors including the future needs of each of the parties.
The courts look at a variety of things here, including future earning capacity, the health of each person, the ages of each person, employment prospects and financial resources, responsibility for the care of children post-separation and divorce, the duration of the marriage and the extent to which it has affected the future earning capacity of the parties.
You may have different living requirements and need to have specific finances to maintain your health or a certain standard of living.
In all, there are fifteen largely prospective factors for consideration covering what each party is likely to need and what each is able to pay to support the other.
PART D – Is the Decision Fair & Equitable?
The court looks at whether or not their decision will be equitable and fair to both of you. The court will then decide on whether or not you keep certain assets or if they are to go to your previous partner.
Women with dependent children can be at a considerable disadvantage compared to men in terms of their financial circumstances and their income earning potential following marital dissolution.
In particular, single mothers and older women living alone post-divorce can experience a drastic fall in living standards.
The court may require that they have a higher adjustment in favour of them as they have a significantly less earning capacity.
Divorce Property Settlement Case
Jane and John have a total of $500,000 in their asset pool.
This includes all bank accounts, property and debts.
John is to get 70% of the property settlement and Jane is to get 30%.
The asset pool is made up of the following.
Marital home worth $1 million with a mortgage of $700,000. So net value is $300,000
1 Toyota Camry worth $30,000
1 Hyundai worth $12,000
Jane’s superannuation $58,000
John’s superannuation $100,000
Total value of all assets is $500,000
The divorce property settlement split has decided to divide the property 70/30, meaning that John will get $350,000 and Jane gets $150,000.
The court makes the orders that:
Jane keeps the Hyundai car ($12,000)
Jane keeps her superannuation ($58,000)
John is to refinance the home and provide a cash adjustment payment of $40,000
Jane is to receive a superannuation split into her superannuation account of $40,000 from John’s superannuation.
This is just an example of how a split could work.
Ultimately it is up to the parties to make decisions as to how they would like to receive the funds and what they would be happy with.
If the parties cannot make a decision, the court will make it for them.
Specialist Divorce Lawyers
Our experienced team practice exclusively in the area of family law.
We aim to provide the service that is right for you, however, we always try and mediate matters with the other party before taking the matter to court.
If you have reached an agreement and want to formalise it so that it is legally binding and enforceable, we can help you do that to ensure that there are no further financial claims.
We are able to negotiate agreements with your previous partner or their lawyers and can represent you in family court proceedings whether you are a respondent, or whether you want to commence the proceedings yourself.
The information provided is not intended to be nor should it be relied upon as a substitute for legal or other professional advice.
For further legal advice, contact our office to arrange an appointment.