When spouses separate it is important that assets, liabilities and all financial matters are dealt with in order for parties to move forward.
Property settlements occur between married couples and de-facto partners and are governed by the Family Law Act.
When the assets, liabilities and financial resources of parties are determined, the Court examines the contributions made by the parties to the acquisition, conservation and improvement of the assets. It also takes into consideration factors such as the health and age of the parties and their earning capacity.
When assessing contributions there is no presumption of an equal 50:50 entitlement between the parties, as each case will be decided differently based on its own facts and circumstances.
Problems can arise however when parties separate but they remain financially enmeshed or where financial matters between separated parties are not finalised until sometime after separation.
The case of Z & Z concerned a 19 year marriage and two adult children. The parties separated in 1994 but property proceedings were not commenced by the wife until 2002. The property pool in 2002 was valued at over $3 million, which had increased significantly since 1994 as a result of the husband’s business, his investment in a company and superannuation interests separate to that of the wife.
At first instance the court split the matrimonial pool of assets 70:30 in the husband’s favour.
The husband appealed, and sought to reduce by 5% an adjustment made to the wife during the first trial. The husband asserted that the wife had made no contribution to his earnings and to the development of his business post separation.
The court determined that in relation to the post separation contributions:
“The husband’s skills in his initial interest in the company acquired during the marriage provided the foundation from which the husband was able to acquire his post separation assets and make substantial contributions to his superannuation fund”.
The court dismissed the husband’s appeal and the matrimonial assets were divided in accordance with the original judgement.
Factors such as the length of the relationship, one party’s care of young children, the disparity in income and the nature of the parties’ financial relationship post separation, will be taken into consideration by the court when making an adjustment for financial contributions post separation.
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