Family Law Property Settlements – Debunking the Myth of the 50/50 Split

Family Law Property Settlements – Debunking the Myth of the 50/50 Split

Following the breakdown of a marriage or de facto relationship, separated parties must consider how to divide joint property. It is crucial to understand each party’s ability to claim entitlements in a property settlement and the assets they are likely to retain.

Family law is a complicated and emotional area of law which is often poorly understood. This is reflected in a great quantity of inaccurate statements often regarded as fact by those in the community. This blog will debunk several of the property settlement myths and provide you with an understanding of the factors a court will consider to resolve a property settlement dispute.

The myth of a 50/50 split

Contrary to popular belief, there is no presumption that assets should be divided 50/50, 60/40 or in any other subjective proportion. The Family Court always has full discretion to divide property in a proportion that is just and equitable for both parties.

People often receive ‘advice’ from well-meaning friends or family as a result of their own experiences. However, no two cases are decided the same and there is no presumption of any kind in relation to a financial settlement when it comes to percentage entitlements. Comparing another person’s property settlement outcome to your own can be misleading and unhelpful when it creates a false expectation or entitlement.

Each property settlement situation is different and should be carefully assessed by a family lawyer qualified to provide you with proper advice.

Factors to be taken into account by the court 

The Family Law Act outlines what factors must be taken into account when the courts consider how property is to be divided. There is no universal equation applied to calculate the weight given to each factor. Property settlement is based on all of the information provided and the discretion of the court in deciding the matter.

To decide how to distribute the assets the court will normally take into account factors including:

  • The current value of the assets and liabilities to establish a ‘net asset pool’. This includes superannuation entitlements, as well as assets held personally, in partnership or trusts, or by companies.
  • The direct financial contributions made by each person to the acquisition of assets or the preservation, improvement or maintenance of those assets. This will include assets owned at the commencement of the relationship.
  • The indirect financial contributions made by each person in the relationship, for example, the giving up of a career to allow the other person to further their own career.
  • The non-financial contributions by each person, like caring for children, being the homemaker and maintaining or improving the assets by personal exertion such as individual efforts in renovations that increase the value of an asset.
  • Identifying the future needs of the parties, for example, age, health, financial resources, superannuation, care of children and income earning capacity.

After considering all of the above factors and others, the Court will consider whether any proposed property settlement is ‘just and equitable’ in the circumstances of the particular case.

The outcome cannot be predicted since no particular factor is given priority over another. For example,  someone who is the sole income earner will not necessarily be entitled to a greater financial settlement than the other person who was a stay-at-home parent to the children of the relationship.

Summary

It is important to remember that there is no presumption of equality (like a 50/50 split) as a starting point in respect of contributions and that each matter will be decided upon the particular circumstances of that case. The Family Court has broad powers to make orders for a just and equitable division of assets.

It is important for anyone considering separating from their spouse, or who has already separated, to obtain independent legal advice from an experienced family law practitioner about their likely property settlement entitlements.

If you would like advice, guidance or assistance about property settlement entitlements following the breakdown of a marriage or relationship, contact Etheringtons Family Lawyers in North Sydney on (02) 9963 9800 or via the form here.

Considerations When Applying For a Divorce

Considerations When Applying For a Divorce

A divorce is legal recognition of the termination of a marriage and a means of ending the legal duties and responsibilities spouses owe to each other. Obtaining a divorce is the initial step in making future arrangements concerning children, property and spousal maintenance. It is possible for parties to live together and still be separated, however, in most cases it is beneficial for both parties to go through the process of a divorce.

Am I eligible to apply for a divorce?

If there is no reasonable likelihood of the parties reconciling and resuming married life and you and your spouse have lived apart continuously for 12 months, you should consider obtaining a divorce. For example, if you wish to remarry, it will be necessary to obtain a divorce from your previous partner first.

You can apply for a divorce in Australia if either you or your spouse:

  • Regard Australia as your home and intend to live in Australia indefinitely, or
  • Are an Australian citizen by birth, descent or by grant of Australian citizenship, or
  • Ordinarily live in Australia and have done so for 12 months immediately before filing for divorce.

Importantly, the time frame for seeking any property or financial orders in the Family Court is twelve (12) months from the date of the divorce being granted.

Divorce cases where children are involved

If there are any children under the age of eighteen (18), a court can only grant a divorce if it is satisfied that proper arrangements have been made for the children. The court’s paramount consideration is what is in the child’s best interests. When deciding what is in the child’s best interests, the Family Law Act 1975 requires the court to take primary and additional considerations into account.

Primary considerations consist of the benefit to a child of having meaningful relationships with both parents and the need to protect a child from physical and/or psychological harm (from being subjected or exposed to abuse, neglect or family violence).

Additional considerations in relation to a parties’ conduct include, but are not limited to, the willingness and ability of each parent to facilitate and encourage a close and continuing relationship between the child and the other parent, each parent’s ability to provide for the child’s needs, the maturity, sex, lifestyle and background of either of the child’s parents and the attitude of each parent to the child and to the responsibilities of parenthood. As a result conduct of each parent during the divorce can play an important role in later proceedings.

Other considerations

However, the granting of a divorce does not determine the issues relating to property and maintenance or parenting arrangements for your children. If you want to make arrangements about these issues you can:

  • Make an agreement with your spouse and file it with a court, or
  • Seek orders from a court, when you and your spouse cannot reach an agreement.

Contact us

We know that the divorce process can be strenuous for both parties. If you would like more information on how we can assist you with your property settlement matter or any other family law matters, do not hesitate to contact Etheringtons Family Lawyers in North Sydney on (02) 9963 9800 or via the contact form here.

Child Relocation

Child Relocation

Child relocation involves the changing of a child’s living arrangements and is one of the most important concerns in a relationship breakdown. International relocation is becoming an increasingly common occurrence, with many people and families moving across the globe for business, opportunities and lifestyle changes. If parents have equal and shared parental responsibility of the children, the following factors in relation to child relocation must be considered.

The Family Law Act 1975 (NSW)

Disagreements on child relocation matters in a family law context can often lead to intervention by solicitors and the court system. Whilst freedom of movement is an accepted right, different principles apply for children and the removal of a child from a country, state or area that is significantly distant from the other parent.

The relevant section of the Family Law Act is section 65DAA. This provision explains the process the court is required to follow in determining if a child should spend equal time or a substantial and significant time with each parent. The definition of ‘substantial and significant time’ in the Act is time that involves the parent in the child’s daily routine and significant occasions for both the parent and child.

Factors taken into consideration

The first consideration which is taken into to account is whether the decision for relocation is in best interests of the child. Secondly, whether it is reasonably practicable for the child to spend equal time or significant and meaningful time with the each parent, and how the time that they currently spend with that parent would be affected by the relocation.

It is generally advised that relocation of a child should not occur until the consent is obtained from the non-resident parent. If consent cannot be obtained, then it is appropriate to seek the Court’s intervention on this issue.

Contact us

Etheringtons Solicitors have recently acted in several complex child relocation matters, and in each we have achieved successful outcomes for our clients. If you are currently in the situation where you are thinking about relocating, whether that be interstate, or to another continent and require advice on a child relocation issue, do not hesitate to contact us on 9963 9800 or via the contact form here.

Child Custody Rights for Fathers in NSW

Child Custody Rights for Fathers in NSW

Understanding Australian Child Custody Laws

Australian child custody laws recognise that fathers have an important role in the caretaking of children by the creation of an equitable agreement between parents that is first and foremost in the best interests of the child. There is a common misconception that mothers retain primary custody of children because they are traditionally viewed as more suitable for the role of primary carer. On the other hand, fathers were considered less likely to retain custody because they were considered more likely to be employed and have a better overall earning potential.

In Australia, child custody laws provide the equitable foundations for a fair child custody split between parents, however there may be many equitable reasons as to why an even split is unattainable.

Research from the Australian Institute of Family Studies

The Australian Institute of Family Studies has recently found that approximately half of mothers would prefer to see increased paternal involvement in their children’s lives. In the same study, a majority of fathers also expressed a preference for increased involvement. Interestingly, the fathers cite the following most common factors that prevent such involvement:

  • Work commitments;
  • Belief that the child’s mother would oppose more involvement;
  • and Physical distance/travel costs.

Child Custody Laws

Australian child custody laws have been reformed in this area to make it clear that there are no specific parents’ rights and that there is no legal distinction between fathers and mothers in terms of child custody. The Court is instead governed by, and legally obliged to consider, the child’s rights and best interests above all else.

The Family Law Act 1975 (Cth) covers diverse matters such as divorce and separation, parenting arrangements, property settlement and financial maintenance of one party by the other.

With respect to parenting matters, the Act states that a “child has a right to be known and cared for by both parents”, without prioritising either the rights of the father or mother. Unless there are allegations of domestic violence or abuse, the Court typically adopt a view that it is in the child’s best interests to spend as much time as reasonably and practically possible with both parents.

How the Family Law Act Applies to Child Custody

When considering parenting arrangements following separation, the court has to determine who the child will live with and spend time with. Both parents have a responsibility for the care of their children, including their financial support. Despite this, the law does not guarantee an equal-shared parenting arrangement in all matters.

If the court does decide that an equal-shared-care regime is not in the best interests of the child, they will try to allocate substantial or significant time to the non-resident parent. The exception is in a case where there is a history of domestic violence or abuse. In the latter case, the Court will prioritise the child’s safety and wellbeing and make appropriate parenting orders.

Further Considerations for Child Custody Rights for Fathers

In determining what is in the best interests of a child, the court will consider the wishes of the child, as well as the nature and history of the relationship the child has with each parent. There might be practical difficulties of long- distance parenting and specific emotional or intellectual needs to consider, as well. Communication between both parents and availability of either parent will also be taken into account.

Conclusion

The family law legislation does not enable the court to take into consideration stereotypical gender roles. Rather, the court’s decisions are strictly governed by the principle of the children’s best interests. If you have any questions with respect to parenting arrangements of your children, please contact Etheringtons Solicitors for advice on (02) 9963 9800 or contact us via our contact form.

Case Study: When Binding Financial Agreements Aren’t Enforceable

Case Study: When Binding Financial Agreements Aren’t Enforceable

A binding financial agreement – also commonly referred to as a ‘pre-nuptial agreement’ – is an agreement sets out the division of property and child custody agreements in the event of the breakdown of a relationship. These documents are legally binding and can be enforced by the courts, which allow for certainty, trust, and peace of mind in a relationship.

However, the High Court has made it clear in a recent case that it will not enforce any binding financial agreements as a consequence of unconscionable conduct, particularly when there is a significant power imbalance between the parties. Unconscionable conduct is defined to mean conduct which is so harsh that it goes against good conscience. A common instance is when an innocent party is subject to a special disadvantage which seriously affects the ability of the innocent party to make a judgment as to their own best interests.

What are Binding Financial Agreements?

Binding financial agreements are legally binding agreements that address what happens to a couple’s finances and property in the event that there is a break down in a marriage or de-facto relationship.

The Family Law Act 1975 is the relevant legislation which applies to binding financial agreements. Importantly, a binding financial agreement can protect assets including cash, property, superannuation and inheritances.

However, in order for a binding financial agreement to be binding on the parties’, it is prudent that each party obtain independent legal advice, and the binding financial agreement must contain a statement from a legal practitioner.

Recent Case: Thorne v Kennedy

A recent High Court case has demonstrated that if a binding financial agreement is entered into in circumstances of unconscionable conduct, the agreement will not be upheld.

Thorne v Kennedy involved a binding financial agreement between a wealthy Australian property developer and his ex-wife.

The couple met online in 2006 on a website for potential brides. At the time, Ms Thorne was 36 years old, living in the Middle East with no substantial assets. Mr Kennedy was 67 years old and had assets in the vicinity of $18 million – $24 million.

Ms Thorne moved to Australia. Then, ten days before their wedding Mr Kennedy took Ms Thorne to a solicitor to obtain advice about the terms of a binding financial agreement which was purported to be entered into between them. The lawyer advised Ms Thorne that the agreement was highly prejudiced against her, and advised her not to sign it. Mr Kennedy told Ms Thorne that if she did not sign the agreement then the wedding would not go ahead. Despite the lawyer’s ‘advice, Ms Thorne signed the agreement and the wedding continued.

The couple separated in 2011 and Ms Thorne was provided with what the High Court described as a ‘piteously small’ lump sum payment based on the terms of the binding financial agreement. After lengthy legal proceedings, the High Court ruled that Mr Kennedy had taken advantage of his ex-wife’s vulnerability to obtain an agreement which was ‘entirely inappropriate and wholly inadequate.’ The agreement was entered into as a result of undue influence, illegitimate pressure and unconscionable conduct – Ms Thorne was in a foreign country, with no support system, and was entirely reliant on Mr Kennedy for financial and emotional support. Mr Kennedy had also promised to help relocate Ms Thorne’s family to Australia following the marriage. As a result, the binding financial agreement was not enforceable and was subsequently set-aside.

Impact on Binding Financial Agreements in Australia

This ruling has been considered a landmark case in the interpretation of binding financial agreements in Australia. As a consequence of the agreement being set aside, the Federal Circuit Court allowed Ms Thorne to bring a property settlement claim against Mr Kennedy.

This case serves to reinforce that binding financial agreements are not cheap documents and therefore appropriate advice and caution must be taken when entering into these agreements.

Contact us

If you would like more information on how we can assist you with your binding financial agreement or any other family law matters, do not hesitate to contact us on 9963 9800 or contact us via the form here.

Understanding AVOs – Apprehended Violence Orders

Understanding AVOs – Apprehended Violence Orders

An ‘AVO’ refers to an ‘Apprehended Violence Order’, issued by a court against a person who has made another person feel fearful of assault, harassment, violence or intimidation.

There are two types of Apprehended Violence Orders:

  1. Apprehended Domestic Violence Order (ADVO), which is issued where the two parties are married, family, or in a de facto relationship.
  2. Apprehended Personal Violence Order (APVO), which is issued where the two parties are not Examples include colleagues, friends or neighbours.

How to apply for an AVO

An AVO can be pursued by the police or, in the absence of the police, through a private application in the local court. If the police will not make the application on your behalf, you can still make an application, but you should get legal advice first. For instance, sometimes the police will not take action where no assault has taken place, but the court may still grant you an AVO.

The police and the courts take AVOs very seriously, and applications will be refused if they do not seem legitimate, or appear exaggerated or fraudulent. If you are considering applying for an AVO, it is useful to write down as much information as you can including dates, times and places of incidents, and how you felt at the time, so you can provide this to your solicitor to obtain the relevant advice.

In Court

This may come as a surprise, but the defendant (the person who the AVO is issued against) can consent to the AVO being made without admitting to any of the behaviour they have been accused of. However, if you are a defendant, it is highly recommended that you consult a lawyer before consenting to an AVO, because it can have serious ramifications and may affect your access to any children. It can also result in you losing a firearms license and in certain types of employment, it can affect your position.

If the defendant does not consent to an AVO, the court will hear the matter to first determine whether a provisional order should be made. Usually a provisional order is made and then the Court will refer the matter to a hearing.

At the hearing, both parties will present their facts to the judge, and the judge will determine whether or not to issue the AVO and if so – how long the AVO will be imposed for and what the conditions of the AVO will be.

Defending an AVO

There are many ways to defend against an AVO. If you are a defendant, it is very important to obtain legal advice before defending yourself in court. If you have not had time to obtain legal advice, you may ask the court for additional time.

As mentioned above, you can consent to an AVO being made against you without admitting to any of the reasons the AVO was issued (e.g. violence, harassment, etc). If the evidence against you is strong, you may wish to consent to it instead of having a contested hearing. In some circumstances, you can apply for the AVO to be revoked or changed.

Our experienced lawyers can assist you in defending an AVO that has been brought against you. We will consider the reasons for the AVO, hear your side of the story, look at all of the facts and advise you accordingly.

Breaching an AVO

It is important to remember that breaching an AVO is a criminal offence. The maximum penalty is a fine of $5500 and/or two years in prison. We strongly recommend obtaining legal advice before acting outside of the terms of any AVO issued against you.

Contact Us

The team at Etheringtons Solicitors are skilled at handling all matters relating to AVOs and are able to assist with complex cases. If need assistance with any area of litigation, do not hesitate to contact us on 9963 9800 or via the contact form here.