Dividing Assets in Divorce: How’s it Done?

Since its lowest level in 1976, the divorce rate in Australia is at its best. However, since the introduction of the Family Law Act, divorce is sadly an outcome that many marriages face, especially with a rate of 1.9, which is still relatively high.

It can be a complex and stress-inducing time, especially when you need to decide who gets what. Our Family law team understands what you are facing, so we have written an overview of how your assets can be best divided for the benefit of both parties in a divorce.

Dividing Assets

While it is a difficult time if you are currently separated, and the next step is divorce, you are probably deciding how the assets are to be divided. Before leaping into it, you need to recognise no magical formula will determine how it is divided. Each relationship is different, which is why there is no one method.

The reality is that you will likely require a lawyer and perhaps attend mediation to complete the process, but with their assistance, it can be achieved.

Within Australia, under the Family Law Act, dividing assets in the instance of divorce must be ‘equitable’ and ‘just.’ This doesn’t mean that it will be a down the middle split because there is a lot to consider when making the divisions. Your case will be dealt with on an individual basis and will include looking at starting assets, current and past incomes, your health and age.

Your lawyer and their understanding of the process will impact how everything is split, so it is best to seek guidance from a family lawyer who does this type of work daily. 

Defining Assets

Defining, declaring and valuing all your assets are part of the divorce proceedings. This will include anything you have in trusts, companies and partnerships; nothing is left unturned. All assets, liabilities and superannuation interest from both parties are part of the final pool.

Both parties must be open about their assets which generally means an exchange of financial paperwork; your family lawyer can assist you in putting a value on it all.

In family law, you will need to include gifts and inheritances; however, there are circumstances where this can be excluded if both parties agree.

The Next Steps

Once both parties agree that everything has been declared and complied with, each person’s contribution is measured. This is not only financial considerations but also parental, homemaker, parent and home renovator considerations. Indirect input made by a family member can also be included. Once this is calculated, each individual involved in the divorce proceedings will be assessed at a singular or range of percentages. Although it probably feels like it should be, this isn’t the final calculation between the couple.

The following steps once the assets are listed and measured, future financial conditions are taken into consideration, as well as:

• Age
• Health
• Who will be primary carers of any children
• If one party has a high capacity for earnings
• And the length of the relationship.

Once this has all been taken into account, there may be an adjustment of the original percentages. Under the Family Law Act, a court can decide whether the outcome is ‘just’ and ‘equitable.’

Is Court Essential to Split Assets

Only a small percentage of cases end up in court, so no, you don’t necessarily go to court to split the assets. The most common methods of these situations are resolved through mediation and negotiations from each party’s solicitor.

If each party involved in the divorce decides to split their assets in a specific way, an application can be made for Consent Orders. The courts are required to view and review these but rarely require representation on the day.

Often, the division of assets can seem complicated to an individual, significantly when you are involved in the divorce proceedings where emotions are likely to be running high; a family lawyer can simplify the whole process. The lawyer has the skills and expertise to carry out any require mediation to ensure that everything is divided as it should be while also assisting with the emotional impact of the process.

As we stated early in the article, it may not be straight down the line split when it comes to the assets, and there is no set formula, but your family lawyer will work out what you should receive and work towards making this a reality. 

If you are in a situation where you are going through a divorce and assets split, call us and ask us how we can help you move forward. Our team wants to make sure you get exactly what you need to ensure that living is simplified and without the emotional upheaval you may have been experiencing recently. Let us move forward with you.

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