When getting married or entering into a de facto relationship, little (if any) thought is given to ownership of assets and debts. Couples tend to be happy and optimistic; believing that distribution of their assets in the event of divorce or separation, will not happen to them. But sadly, many couples are incorrect about this and often find themselves embroiled in a battle of who will get what.
For many the assumption that the assets you built together will be divided equally amongst you, is incorrect. Rather than taking this position, the Court will instead look to the laws of equitable distribution, which is not necessarily a fifty-fifty split of your combined assets.
But before the Court will even look to the division of ownership of the couples accumulated wealth, you first must supply the court with a detailed list of all of your personal assets, your partner/spouse’s personal assets and your combined personal assets. This means that you will have to disclose any assets you held before you were married and prove that they remained you separate assets during the course of the marriage or partnership. These types of assets include;
- Previously vested retirement/superannuation funds
- Property ownership or its value that was owned prior to the marriage/partnership and kept separate throughput the life of the same
If you cannot prove that these types of assets remained separate property, they can be subject to equitable division. Therefore, anything that is not considered separate property, will be categorized as community property. Community property can include;
- Earned income
- Superannuation values
- Family contributions
- Real property
- Business ownership/valuation
If an investment, or an account of funds, is considered community property, the Court will then look to what is the most equitable distribution of these assets to the parties. However, there are several factors that are taken into consideration when equitable distribution is being determined. For example;
- Did one spouse contribute their time and forgo their career to raise children?
- Which spouse has the higher earning capacity?
- Future needs including health care, cost of living increases and needs associated with aging?
- Will one spouse be more financially responsible for the children than the other?
Each of these concerns, and others not specified here, will be taken into consideration by the Court before making a final determination as to how the assets can be best divided. Ultimately, the Court will review all of the assets available and the combined needs of the divorcing parties and their offspring, before making a final determination as to asset division. Once this determination is made the parties will be legally required to abide by the judge’s determination.
But, more importantly, it is not necessary to surrender control of these all important decisions to a judicial stranger. It is often wiser to attempt to work these financial issues out using two attorneys or a mediator. When divorcing couples use resources other than the court system, they retain more control over the final distribution of their assets and allow for their own creativity and logic to create a more personal and livable outcome for all involved. Hence, if you are facing divorce it can be a tremendous advantage to all parties to work cooperatively with the assistance of a qualified negotiator.
If you find yourself in need of assistance with this, or any other legal issue, please contact the law offices of Owen Hodge Lawyers. At Owen Hodge, we are always happy to assist clients in understanding the full ramifications of any and all of your legal needs. Please feel free to call us at your earliest convenience to schedule a consultation at 1800 770 780.