How to consider the division of assets during a Divorce Settlement

The first step you will first need to take is to collate a list of all your assets and liabilities, and their agreed values.  The parties have a duty of full and frank disclosure, and must be honest and up front.  So it is important to list any and all assets and liabilities.

This includes superannuation.  Superannuation is usually a quite significant asset and is able to be split between the parties. 

Other assets to note include cars, boats, real estate, shares – anything and everything that has value as well as those items that have nominal or sentimental value only. 

You will also need to list liabilities such as home loans and credit card debts, to get a full picture of the financial situation.  Liabilities can be divided or allocated to one or other of the parties in the same way that assets can be.

For ease, you can separate the list into items owned prior to the relationship, items accumulated during the relationship, and items acquired after the relationship ended.

You should then consider all relevant matters pertaining to the relationship and the assets before deciding how the property and liabilities should be divided.  As a guide, section 79(4) of the Family Law Act directs the Court to consider the following matters in property settlements:-

• Direct financial contributions to the acquisition, conservation or improvement of any of the property;
• Indirect financial contributions to the acquisition, conservation or improvement of any of the property;
• Non-financial contributions made directly or indirectly to the acquisition, conservation or improvement of any of the property;
• Contributions made to the welfare of the family (including contributions made to the welfare of the other spouse party and/or to any children), including contributions made by way of homemaker or parent;
• The effect of the settlement of the earning capacity of either party;
• Any order made affecting a party to the marriage or a child;
• Child support that a partner has to pay under the Child Support (Assessment) Act.

Other factors that may be taken into consideration include:-

• The ability of the parties to support themselves;
• The age and health of each of the parties;
• The income, property and financial resources of each of the parties and the physical and mental capacity of each of them for appropriate gainful employment;
• Whether either party has the care or control of a child of the marriage who is under 18;
• Commitments of each of the parties that are necessary to enable the party to support himself/herself and a child/ren or other persons the party has a duty to maintain;
• The eligibility of either party for a pension, allowance, benefit or superannuation;
• A standard of living that is reasonable in the circumstances;
• The effect of any settlement on the ability of a creditor to recover the creditors debt;
• The duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under consideration;
• The need to protect a party who wishes to continue that party's role as a parent;
• If either party is cohabitating with someone else – the financial circumstances relating to the cohabitation.

This list is not exhaustive and each case will be different.

As you can see, there is no set rule as to how assets and liabilities are divided.  Certainly, there is no rule that property needs to be divided equally down the middle.  Rather, many different factors are taken into account (particularly those listed above) to determine a fair and equitable division in the circumstances.

For more information and Family Law resouces please visit http://www.rpemery.com.au/binding-financial-agreements.html