Separation can be a stressful time, especially if you’re wondering what kind of money you’ll be entitled to after your marriage ends. In general, there are four steps in order to work out who gets what:
- What are the assets and liabilities?
The first step is to have a look at what the parties own and owe. This might include things like a house, car, motorbike, business, shares, superannuation and money in the bank. Debts can include mortgages, personal loans, credit cards and overdrafts.
- What did each party contribute?
The second phase of the process is to understand what each party has brought to the relationship and to the asset pool. This includes both financial and non-financial contributions. Examples of a contribution to the relationship might include: income, inheritance, improvements to the home or property, home duties, parenting, compensation payouts, and more.
It is important to note that even if you are a stay at home parent or house wife/husband, that your contribution in home duties may be considered equal to the income contribution of the working spouse.
- What are the future needs of the parties?
Once the asset pool has been determined and the contributions have been noted, the process now looks at where the parties will be in the future and what their needs might be. Some relevant considerations include:
- Is either party working? Is one party earning substantially more than the other?
- Will either party be able to work in the future? Are there any barriers such as disability?
- Will either party be responsible for a dependent?
- Will either party be supported by a new partner in the future?
- Is it just and equitable?
After everything is considered, is the ratio fair? Is one party walking away with 90%, and the other with only 10%. In most cases, the court will not go above a 70/30 split unless there are extenuating circumstances.
Mediation or Court?
It’s good to try and settle things through mediation or negotiation before going to court. Court can be costly and may take in excess of two years to finalise. If you’re able to come to an agreement about who gets what without going to court, you’ll be able to wrap things up earlier, and you won’t be spending you share of property on fees.