When couples decide to end their relationship, the inevitable question arises in relation to their assets, what am I entitled to and in relation to the debts, who is responsible to pay them off?
There is a common misconception that simply by being in a defacto relationship for 2 years or more or being legally married, there is an automatic entitlement to half of the assets of the other party when the relationship breaks down.
There is no case that has been decided by the Court nor is there a part of the Family Law Act that says that a person is entitled to half the assets of the other party just based on relationship status alone.
There are many factors and considerations that need to be weighed against each other when determining property settlements.
It is important to consider what each parties’ contributions have been. The main types of contributions include:
- Direct financial contributions – these usually are wages or investment income.
- Non-financial contributions – such as homemaker and parent.
- Indirect financial contributions – these can include receiving an inheritance or compensation payment.
The relevant factors and considerations don’t end there though. There are other things to consider such as does one party have access to a financial resource such as a pending personal injury claim or perhaps even an entitlement to long service leave.
Perhaps one party may be wishing to keep an asset that generates significant income, a commercial property for example.
One party may be taking on most of the care of children which can impact that party’s ability to work in a role that can increase their income.
These are just some of the things to consider when looking how to divide property after separation. It is important to get expert and sound advice before taking steps to divide property to ensure you know what your particular circumstances might mean for you.