A family court can make property orders finalising the financial issues in dispute between parties who have been married or in de facto relationships . This can be done by consent or following a hearing.
Do we each get 50/50?
There is no mathematical formula to determine the percentage a party will receive, nor is there a presumption that property will be divided equally. Each dispute is determined on its own facts and circumstances.
The court will not consider who is responsible for the breakdown of a relationship in determining how property is divided.
What can a court make orders for?
Property orders relate to property (assets and liabilities) of parties, including items such as real estate, savings, motor vehicles, jewelry, superannuation, business interests, trust interests and mortgages, loans and taxation liabilities.
Property includes lump sums received by a party during the relationship including inheritances, gifts, lottery winnings, redundancy payments and compensation pay-outs.
Importantly, the court also takes into account assets a party brings into the relationship as well as post-separation contributions.
Can the court decline to make orders?
Before making orders, the court must be satisfied that it is just and equitable to make any property orders altering the interests of the parties.
While in most cases the court ends up making property orders altering the interests of the parties, in unusual cases it will decline to make any orders. This is because court is not satisfied that it is just and equitable to make property orders. This would be the case where the court finds that the ownership of property of each party should stay as it is. An example would be a short relationships where parties have kept their finances separate, do not own any asset or liability jointly and have no children.
How much will I get?
The court `engages in the following four-step process before deciding on final property orders:
- Identify the net matrimonial pool. That is, the assets of the parties less the liabilities of the parties. The pool includes property that may not necessarily be in the names of the parties, but in reality belongs to a party. Examples of this include interests in a business or benefits under a trust. The court may consider the superannuation of the parties either separately or together with the matrimonial pool, depending on certain factors.
- Identify and evaluate the contributions made by each party (financial and otherwise)
Financial contributions include direct contributions (for example, to purchase of assets and repayment of debts), as well as indirect contributions. Non-financial contributions include care of children and homemaker responsibilities.
The court may, or may not, make adjustments based on contributions in favour of one party.
For example, the court may make an adjustment of 5% in favour of one party for greater contributions.
- Determine what, if any, adjustment should be made based on future needs of a party.
There are a wide range of factors that can be taken into account including age, health, earning capacity, financial resources and care of children.
For example, the court could make an adjustment of 5% in favour of one party by reason of that party having future care of a child.
- Determine whether it is just and equitable to make property orders.
The court then steps back and looks at the final split it has arrived at and asks itself, “Is this split just and equitable?
Upon the court being so satisfied, it makes final orders, in which it stipulates the percentage of the net pool that is to be distributed to each party (eg 50/50, 60/40 etc).
It then stipulates what items of property each party will receive and/or the manner in which property is to be sold.
Time limits for property applications
- You do not have to be divorced to apply for property orders. You can apply for property orders if your marriage has broken down ie you and your spouse have separated.
- If you are divorced then, you have 12 months from the date of your divorce to apply for property orders (including spousal maintenance orders)
- If your de facto relationship has broken down, then you have two years from the date of separation to apply for property orders (including de facto maintenance)
Timing of application to court
The court works on the values the matrimonial property as at the date it hears the matter. It is often the case that the values of matrimonial property change significantly between the date of separation and the date of the court case. This may negatively affect one party more than the other.
It is thus desirable that you obtain advice about a property dispute from an experienced family lawyer as soon after separation as possible.