Upon the breakdown of a marriage, de facto couples or separated married parties are required to reach agreement as to the division of the assets of the relationship. Division of assets is separate to divorce and there are specific time limits imposed by the Family Courts you should be mindful of. An application for property settlement or spousal maintenance must be commenced within 12 months of a divorce order taking effect for married couples, or within 2 years of the breakdown of a de facto relationship.
Reaching an amicable agreement with your wife about the division of joint assets will save you time, money and stress. Alternative dispute resolution processes, including mediation, may assist the parties in resolving any disputes that arise throughout this process.
If you cannot reach an agreement with your wife through these means, you can apply to the Federal Circuit and Family Court of Australia (‘the Court’) to have financial orders made that will settle the dispute for you.
What is a financial order?
A financial order is a set of orders made by the Family Court relating to the division of property or finances. When applying for a financial order, the Family Court will hear evidence presented by you and your wife and make a just and equitable decision. This decision may include altering property interests, redistributing finances, and ordering for the payment of spousal maintenance.
What factors affect the Court’s decision?
Contrary to the belief of a 50/50 split, there is no established formula or percentage the Court will use when making financial orders. Instead, decisions are made on a case-by-case basis depending on the individual circumstances of the separated parties.
The Family Law Act 1975 (Cth) s 79(4) sets out a number of factors for the Court to consider when making financial orders. These factors include but are not limited to:
- The ‘net asset pool’ comprising of the current value of all assets and liabilities. This includes superannuation entitlements, personal assets, assets in partnership, trust, or companies.
- Direct financial contributions toward the acquisition, conservation or improvement of any property of each party. This includes assets owned at the beginning of the relationship.
- Indirect financial contributions such as gifts or inheritances.
- Non-financial contributions toward the acquisition, conservation or improvement of any property of each party. For example, home improvement or renovations to increase the value of the family home.
- Financial contributions made to the welfare of the family, including any contribution made in the capacity of a homemaker or parent.
- The impact of family violence, including if a party was prevented from engaging in employment, as well as assessing their current and future needs.
- The future needs of each party with regard to age, health, financial resources, superannuation, childcare, and earning capacity.
The Court’s decision may involve the alteration of property interests and asset ownership to allow for the just and equitable redistribution of finances between parties.
Am I required to pay my wife spousal maintenance?
Spousal maintenance is financial support that is paid to your wife if he cannot adequately support himself following separation or divorce. This obligation depends on the financial capacity and needs of each party. Wifes and wives share an equal duty to support and maintain one another should the circumstances call for it.
For example, if your wife is unable to support himself after separation, and you have the financial means to support him, you may be required to provide your wife with spousal maintenance.
Ultimately, an order for spousal maintenance is decided by an overall assessment of each party’s ability to adequately support themselves, and if they are unable to do so, whether the other party has the capacity to meet those expenses and support them.
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It is important to remember that there is no presumption of equality when dividing assets following a separation or divorce. If you are considering separation, or have already separated from your wife, we recommend seeking independent legal advice.
If you would like to discuss your unique situation with a highly experienced family lawyer, please contact Etheringtons Solicitors in North Sydney on (02) 9963 9800 or via our online contact form.