The forgotten considerations – Future needs factors and their effect on your family law property settlement entitlements

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Upon first meeting our clients, many of them are aware that when considering how a property pool of a separated couple is to be divided, each party’s contributions are assessed and weighed against one another. Whoever made the greater contributions receives the greater share of the property, right?

This is partially true, but contributions only make up one 1 step of property settlements.

The Future Needs factors

This article will focus on the less well-known but equally important future needs step. Those needs are extensively listed in the Family Law Act under s.75(2) for married couples and s.90SF(3) for defacto couples. They are:

  • The age and health of the parties.
  • The income, property and financial resources of the parties and their capacity for appropriate gainful employment.
  • Whether either party has care of a child of the relationship.
  • The commitments of each of the parties which are necessary to support themselves and their children.
  • The responsibilities of either party to support another person.
  • The eligibility of one party to receive a pension, allowance, or benefit (e.g. Centrelink payments).
  • A standard of living that in all the circumstances is reasonable.
  • The extent of whether maintenance would increase the earning capacity of the other by allowing them to undertake training or education.
  • The effect of the order on the ability of a creditor to recover debt from the parties.
  • The duration of the relationship and the effect it may have had on the earning capacity of one of the parties.
  • If one party is now living with someone else, the financial circumstances of that person.
  • Whether a party is bankrupt.
  • Any child support assessment in place.
  • Any formal binding financial agreements entered into by the parties.
  • Any other circumstances the Court considers should be taken into account.

The factor’s effect on your property settlement

The Court will weigh these factors based on the facts of each case and if appropriate can make a dollar-sum or percentage-based adjustment in favour of one party after contributions are taken into account.

For example, if one party is significantly older than the other, a Court may find their needs are higher than their younger gainfully employed ex-partner as the first party has fewer working years ahead of them. Another common scenario is the primary care of young children. This will usually create a larger financial expense for that parent when compared to the other.

However, each factor is not considered in isolation. For example, it may be that one party has the primary care of the parties’ young children which in isolation would warrant an adjustment in their favour. However, this may be counteracted by the comparably worse health or financial position of the other party, so making no adjustment on future needs to either party may be the just and equitable outcome.

Property settlements can be a complex area of family law. If you require advice about property settlement, future needs factors, or family law in general, please contact our office on (02) 4944 3322 to make an appointment with one of our family law solicitors.

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