A 60/40 split in divorce refers to the partition of assets in which one party receives 60% and the other receives 40% of the marital assets.
This division of assets is not predetermined or standardised under Australian law; it depends on the particular circumstances of each case.
Section 79 of the Family Law Act of 1975 specifies the procedure for determining divorce property settlements.
What Is A 60/40 Split In Divorce, And How Is It Computed?
Let’s establish a hypothetical divorce settlement in Australia, where the property is divided 60/40.
Please remember that this is a simplified example, and actual cases may be significantly more intricate and complicated, requiring legal counsel and court decisions.
60/40 Split Example Scenario
A couple is divorcing after 20 years of marriage. They have two children, aged 15 and 17.
Their total assets amount to AUD 1,500,000, which includes their house, cars, savings, investments, and superannuation.
They also have a mortgage on the house of AUD 300,000 and credit card debts totalling AUD 20,000.
Step 1: Identify the Asset Pool and Deduct Liabilities
The couple’s total combined assets amount to AUD 1,500,000.
Their total liabilities (the mortgage and credit card debt) amount to AUD 320,000.
The net asset pool would thus be AUD 1,180,000 (1,500,000 – 320,000).
Step 2: Assess Contributions
Assuming both parties contributed equally during the marriage, both financially and non-financially, an initial 50/50 split of the net assets seems reasonable based on their contributions alone.
Step 3: Consider Future Needs
The wife has been a stay-at-home parent for the past 10 years and will be the primary carer of the children post-divorce.
She has lower earning potential and a greater burden of care. The court may therefore adjust the initial 50/50 split to consider these future needs.
Step 4: ‘Just and Equitable’ Adjustment
The court determined that a 60/40 split in favour of the wife would be just and equitable, considering her lower income, job prospects, and the fact that she would be the primary carer of the children.
Final Calculation:
So, the final division of assets to know the answer to the question: What Is A 60/40 Split In Divorce would look something like this:
Wife: AUD 1,180,000 * 60% = AUD 708,000
Husband: AUD 1,180,000 * 40% = AUD 472,000
Can My Wife Still Claim on My Future Earnings After the Finalisation of Divorce and Property Settlement?
Once a property settlement has been finalised – whether through a Binding Financial Agreement (BFA), Consent Orders approved by the Family Court, or a court order following litigation – neither party can typically claim the other’s future earnings.
A property settlement aims to establish a clean financial separation between the parties.
It involves contemplating future requirements, such as child care, age, health, financial resources, earning capacity, etc., at the time of settlement.
This is considered when determining the percentage distribution of the asset pool.
Does The Law Always Take The Side Of The Housewife In Property Settlement?
No, the law does not always favour the housewife, or any party, in a property settlement.
In Australia, the Family Law Act 1975 establishes the framework for property division upon separation and divorce, and it does not inherently favour one party over the other based on their role as a housewife or breadwinner.
The law instead requires a just and equitable division of assets. It considers various factors, including the direct and indirect financial and non-financial contributions made by both parties during the relationship and their future needs.
Suppose one party, for instance, the housewife, has a lower income-earning capacity and greater childcare responsibilities. In that case, they might receive a larger portion of the assets to offset these future needs.
Both parties are required to provide full and transparent financial disclosure to both their former spouse and the court during divorce or separation proceedings. Concealing assets during a divorce carries serious consequences.
Unsure What Is A 60/40 Split In Divorce?
Trust Justice Family Lawyers to guide you through this complex process. Our experts can help explain and ensure a fair distribution of assets in your case.
Discover the answer to the question: What is a 60/40 split in divorce? How it impacts your future. With Justice Family Lawyers, get the clarity and representation you deserve.
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.
