Understanding Asset Pool Division in Family Law Property Settlements
Family Law property settlements involve the division of assets that have been accumulated while a couple is married or in a de facto relationship.
The ‘asset pool’ is a concept used to divide the property in a value-neutral way, meaning no one spouse is advantaged or disadvantaged.
To ensure a balanced division of assets, it is important to understand the principles of dividing an asset pool in accordance with the Family Law Act. In this article, Justice Family Lawyers will guide readers through the key points to consider when dividing an asset pool in the context of a Family Law property settlement.
- An asset pool is all of the resources accumulated by a couple while they are married or in a de facto relationship.
- Asset pool includes EVERYTHING – assets, debts, things that were brought before the relationship and after relationship.
- Determine the value of assets, then assess what the division of assets should be.
What is an Asset Pool?
An asset pool is often referred to as the ‘assets and liabilities’ of a couple.
It is the sum of all of the resources accumulated by a couple over the course of the marriage or de facto relationship.
This includes any financial or real property such as the family home, and can also include other items such as shares, trusts, and vehicles. The asset pool also includes any debts owned by the couple.
We find that it helps clients if they use a spreadsheet or table to put all of their assets and liabliites on a balance sheet so they can see clearly what needs to be split.
A balance sheet can be a valuable tool in achieving a financial settlement during a breakup because it provides a snapshot of a person’s financial position.
Examples of things that will be split in an asset pool division
- Real estate: This can include residential or commercial properties, land, and any improvements made to the property.
- Personal property: This includes tangible items such as furniture, artwork, jewelry, vehicles, and other personal possessions.
- Financial assets: This can include bank accounts, shares and superannuation.
- Business: If one of the parties owns a business, the value of that business may be divided as part of the asset pool.
- Debts: Any liabilities or debts associated with the parties.
Asset Pool Division
As outlined in the Family Law Act (1975), when dividing an asset pool, couples must follow the 4 step approach under section 79. Here are the 4 steps:
- Step 1 – dermine the exact financial and non-financial value of all the assets and liabilities in the pool. This is done through advice and valuations.
- Step 2 – assess the financial contributions and non financial contributions each party made to the asset pool
- Step 3 – assess the future needs of each party
- Step 4 – assess if the outcome is just and equitable
A lawyer can play a vital role in helping you with the division of assets during a divorce by maximising the amount you received from a property settlement.
Family lawyers typically charge between 10 – 30k for their services, meaning that if they are able to negotiate an amount or obtain an amount higher than that, it would be a good idea to engage one.
Justice Family Lawyers have the specialist knowledge and experience to assist you in understanding these complexities and providing you with the best possible outcome in a Family Law property settlement.
Principal of Justice Family Lawyers, Hayder specialises in complex parenting and property family law matters. He is based in Sydney and holds a Bachelor of Law and Bachelor of Communications from UTS.