When a married or de facto couple separate or divorce, a significant part of that process is the separation of assets and liabilities – known in the family law world as “property settlement”. Property settlement encompasses division of joint assets, protection of assets in only one party’s name, a claim on one party’s assets by another, and any dealings in between. It even involves arraignments as to who gets what piece of furniture – and even who was “custody” of a treasured pet (who unfortunately are still considered property by the Courts).
Property settlement involves figuring out the value of everyone’s assets and liabilities (joint and not), and then dividing all those net assets in a percentage.
The percentage will shift depending on a number of factors. A significant step in determining who receives what percentage is considering what contributions each party has made to the marriage or relationship.
The Courts consider contributions that are made at the commencement of and during a marriage or relationship and also post-separation.
Contributions can be financial or non-financial
Financial contributions are essentially what money each party has brought to the relationship. This includes:
- What both parties had by way of assets (or debts!) at the start of the relationship
- What each party brought in by way of income during the relationship
- Whether one party received a windfall such as a lottery win or an inheritance
- Any “wastage” of assets by parties as a non-contribution, such as money spent on gambling or other uses the Court considers to be a waste
Non-financial contributions are any contributions that are not financial in nature. They can include:
- Care of children
- Household duties
- Undertaking renovations or other works to improve the value of a property
The Courts will usually consider a host of other factors to determine property settlement, however, contributions remain a very important part of that process. Usually if a party has no children, or if their relationship or marriage is deemed to be relatively short in duration, contributions will be the most important factor in determining the entitlements for each party upon separation.