Pre nuptial agreements &Financial Agreements

The Family Law Act sets out the process to be undertaken to identify the entitlement of each party to financial assets and liabilities after the breakdown of their relationship. A common misnomer is that there is an automatic 50/50 division of assets between the parties. This is not the case. Instead, the Courts apply a step by step process. 

Stage 1 - Is it just and equitable to alter the parties property interests?

For many people, this question may seem silly. If you have been married for 15 years, have 3 children and joint assets, then this step is really just a check box. However, in some circumstances where relationships are more grey than black and white, and the financial resources of the parties have not been pooled, this can be a significant question that is considered at great length during the process. The particular nature of the property pool between the parties can also give rise to additional consideration to this question.

Part of this decision can include determining if the parties were in fact in a de facto relationship, if this is an issue in dispute. It is not always clear whether the parties were in a de facto relationship. 

If the parties agree that it is just and equitable to alter the parties' interests, or the Court determines it is, then you proceed to the next steps to establish the property settlement.

Stage 2 - What is the property pool to be divided between the parties?

This involves the identification of the value of the assets, liabilities and other entitlements that would form what is known as the net asset pool.

These items include those in your sole name, your ex-partner's sole name, joint names, or the portion that you own in property owned jointly with other third parties.

Assets includes houses (including the family home and investments) and land (metro, rural, investment and your principal place of residence), shares, boats, motor vehicles, motorbikes, plant and equipment, tools (including tools of trade), business interests, and superannuation.

Liabilities can include mortgages, personal loans, credit cards, charge cards, HECS or HELP debts, AfterPay, Zippay, Zip Money and any other debts such as a debt to a family member.

It is important to note that the assets and/or liabilities are often included regardless of whether you or your spouse knew about their existence.

During the property settlement process, all parties have an ongoing obligation to provide disclosure of relevant information and documents. This extends to material and information which enables the property pool to be properly identified.

Stage 3: What are the contributions to the acquisition of the property pool by each party?

This involves an assessment of the financial and non financial contributions made at the commencement and during the course of the relationship. The usual approach of the Court will be to make a percentage finding in this regard, as well as taking into account the contributions made to the acquisition, conservation and improvement of property and the contributions to the welfare of the couple. It is important to note that this is not a mathematical calculation, but a holistic assessment of all contributions.

Financial contributions to the property pool include things such as wages, compensation payments, lottery wins or other windfalls, owning a property at the commencement of your relationship, inheritance payments or gifts from family and friends.

Non financial contributions to the property pool include things such as upkeep and maintenance to a property, caring for children, caring for your former partner's children.

Stage 4 - What are the future needs of each of the parties?

 This places a focus on additional factors, for example each person's future economic position or any disparity in income earning potential, the age and state of health of each of the parties, as well as the effect the Orders will have on providing a reasonable standard of living for each of the parties. At this stage, there is also consideration given to the children of the relationship and their circumstances. For instance, if they live primarily with one parent, then this can be taken into account.

Stage 5 - Is the proposed division just and equitable in all of the circumstances?

This ensures that any distribution of the property pool is done so on a just and equitable basis.

To do so requires confirmation that the resolution is practical and fair, and can include a consideration of any other matters at the discretion of the Court. For instance, this could include consideration of things such as tax implications, or the loss of an ability to work due to the proposed orders (ie. they require the sale of a self employed business).

$1,100 - $1,430 professional fees for a standard Application for Divorce

$2,200 - $3,300 Plan where no negotiations required

$3,300 - $4,400 – advice on a pre-prepared Binding Financial Agreement

Payment plans available

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