Divorce and separation can be hard on you, emotionally, and financially. A lot of time, money and love invested into another person, now has to be sorted through. Property needs to be divided up between parties and everyone you speak to has a story about how someone they knew got more or less in the settlement- a 60/40 split or a 70/40. Even as precise as a 52.5/47.5. This can often lead to confusion, anger and frustration. All lawyers follow a 4 step process in assisting parties at arriving at a fair and equitable settlement.
The first step in this settlement process is:
Identifying the value of all assets
Make a list of all the assets and liabilities that you each have solely or jointly with each other or another person. These can include a family home, investment properties, cars, boats, shares and bank accounts. You can have other assets, such as art works, collectables, other Intellectual Property, and more. Once you begin looking, you may be surprised at just how productive your relationship was.
Some negotiation can follow from there, as one party buys out the other on assets.
Consider the contributions made by each party
These contributions can be financial or non-financial. And it is the non-financial contributions which prove the trickiest to quantify. When were these contributions made – at the start, during the relationship or after separation?
How do you quantify the contributions made by a full time stay at home parent? How much is it worth to have used your own time and skills to increase the value of an asset, such as home improvements. Does one party have “special skills”?
Along with this, what gifts, inheritances and lump sum payments have been obtained during the course of the relationship? This helps to arrive at a contribution based entitlement.
Step 3 throws a curve ball into the already hefty mix of consideration
Future Needs Factors
These factors can increase or decrease the entitlements to either party. Things such as age, health, the income earning capacity of a party, and the resources available to a party, all contribute to this step and the decisions made following it.
Other factors in this step include who is taking care of children under the age of 18, and for how long. Plus what standards of living were each party enjoying, and what is required to maintain that standard going forward? This provides an adjustment factor to be applied to the contribution based entitlement. Clearly this is very discretionary and it isn’t a case of one size/ percentage fits all. An experienced lawyer can advise you as to how this would be likely to be viewed by a court so that you can negotiate from a position of knowledge rather than expectations that are too high or selling yourself short.
And finally, step 4
Is what is being proposed FAIR and EQUITABLE?
The decision making process for reaching a settlement at the end of a relationship is more art than science, more of a deep understanding of the law and how it is applied rather than a bookkeeper’s ledger. The experience of your lawyer comes into play at this time, being emotionally separate from the relationship gives your lawyer an advantage and a clearer idea on what is fair and equitable.
If you’re in doubt about your rights, if you think the decisions being made by your spouse/partner are not fair or equitable, then I urge you to give Knox Family Law a call- 0403 617 920