Question of the week #7
Q: Should my property settlement be split 50/50?
A: There is a common misconception that all property settlements should be split 50/50. However, the law says that there is no such presumption.
When it comes to property settlements, whether parties agree by consent or it is dealt by way of initiating application in the Family Court, the courts must be satisfied the final percentage split is “just and equitable”.
The Courts follow a 4 step process set out in the legislation (section 79(4) of the Family Law Act 1975 or Section 205ZG(4) of the Family Court Act 1997) to determine what the percentage split should be in each individual matter.
The 4 step process is as follows:
1. Firstly, the courts must Identify and value the assets and liabilities of the parties;
2. Secondly, the courts must consider the contributions of the parties (this includes, initial contributions, and contributions during the relationship both financial and non-financial contributions);
3. Thirdly, the courts must identify the future needs aspect of the parties (usually, this entails the care of children under 18, the age of the parties, income earning capacity of the parties); and
4. Finally, the courts must ensure that the division is “just and equitable”, in other words “is the division fair?”
Therefore, it is not always a 50/50 result, it will depend on each individual case.