Ways and means
When a relationship breakup or divorce occurs, the parties have the option to arrive at their own property settlement solution after separation.
This may be by a Binding Financial Agreement, or Consent Orders issued by a Court that will make binding an agreement mutually consented to by both parties.
When these options are not possible for whatever reason, it may well be left to the Family Court to make a determination on how the accumulated asset pool is apportioned. In this circumstance, the Court is bound by the Family Law Act 1975.
A 4-step process is used to arrive at the final judgement, the first 2 of which are:
- Ascertain the total asset pool
- Assess the contributions made by each party, both financial and non-financial.
The third step – fine tuning
The next vital step is to make an assessment of the future needs of both parties. The considerations for this step are concisely laid out in section 75 (2) of the Act, and in general terms are:
- Age and state of health
- Income, property, financial resources, and the physical and mental capacity to be gainfully employed
- The need to care for a child of the marriage
- Commitments necessary for each party to care for themselves, or a child or other person that there is a duty to maintain
- The ability to access a government pension or allowance
- The ability to maintain an appropriate standard of lifestyle that is considered appropriate
- The duration of the relationship and the affect that has had on the earning capacity of either party
- The extent to which payment of maintenance would allow a party to retrain or establish a business
- The need for one party to continue in the role as parent and primary care provider to children
- If either party is cohabiting with a new person, the financial status of that arrangement
- The need of either party to pay ongoing child support
- The terms of any financial agreement that is binding on the parties
- Any other factor that the Court considers relevant
50:50?
Any analysis of the above considerations should not be attempted in a forensic accounting way, as the variables are complex and their combined effects intertwined. It should be noted that age and state of health are considered only as far as their effect on future self-reliance and earning capacity. While children from the relationship – and by definition that means under the age of 18 – will be cared for, it may be that one or both parties also have duties to other children from previous relationships. Similarly, either party may have expected duties of care to other people, for example, an elderly parent, invalid relative or friend.
While there may be a general presumption of a 50:50 starting point, the reality is that the circumstances of cases vary enormously, and the Family Court treats each set of circumstances on individual merit. The future needs of both parties are firmly considered, and importantly, the future needs of children and dependent individuals.
What would a reasonable person … ?
No doubt we have all heard that phrase, and it points to the essence of the last step in the 4-part process. At the end of the day, the Family Court seeks to arrive at a complete determination that meets the final test – is the end result just and equitable to all persons implicated?
Family law … what are my future needs? Let us guide you. If you have any questions about the issues raised in this article or about your Family Law considerations, please don’t hesitate to contact Owen Hodge Lawyers today on 1800 770 780 or via the ‘enquiry now’ button below.Â