Divorce is never easy, and the process of dividing marital assets can add a layer of complexity and stress. Understanding how assets are classified and divided can help ease some of this burden. Read on to learn about the key aspects of marital asset division, including what constitutes a marital asset, how the courts determine a fair distribution, the steps you can take to protect your interests, and the need to consult a legal professional.
In Australia, assets of a divorcing marriage must be split between them in a fair and reasonable manner. A Binding Financial Agreement negotiated by the parties (and typically their legal representatives) could formalise this divide. In the event that the couple is unable to reach an agreement, they may request a consent order or a court order from the Federal Circuit and Family Court (FCFCA).
If any of the two parties submits a court application, a Judicial Officer (such as a Registrar or a Judge) will evaluate the couple’s financial situation, including the amount of marital assets and each party’s contributions. The Australian statute controlling the division of marriage assets is the Family Law Act of 1975. With a focus on married couples, this article examines how marital assets are split between divorcing partners.
Filing an application with the Australian Court
Before requesting a consent order or court order, a couple must sincerely try to come to an understanding. Proposed consent orders can specify the parameters of any agreement reached by the separated couple. The Court must get a copy of this agreement. The proposed orders will become legally binding and enforceable if the court finds that the agreement is fair.
Both parties must give a full and truthful disclosure of all their assets and liabilities, including their income, real estate, superannuation benefits, and other financial resources. information is necessary until the matter is settled, and withholding information could result in the order being revoked.
Do property agreements have a deadline?
For a married pair, the application for a financial or consent order must be submitted within a year of the divorce decree’s date, and for a de facto couple, it must be submitted generally within two years of the date of separation. Only after this, under very special conditions, may a property settlement application be submitted.
How are assets divided in court?
The Court’s ultimate objective is to reach a just and equitable decision. Following the identification of all marital assets, the Court will take into account each party’s contributions to the asset’s acquisition, upkeep, and preservation. The financial and non-financial contributions made by each partner to the marital assets will be scrutinised by the court. It will also consider the needs of both parties in the future, such as how much time each will spend raising children, the mental and physical health of each partner, and their employability. The court applies whatever reasonable weight to these factors.
What are marriage assets?
All money earned during a relationship and everything bought with that money are considered marital assets. Any debts incurred during the marriage are also included. The asset pool includes both jointly held assets and assets registered in the name or under the control of one party. Except in cases where an existing asset was used to acquire a new asset (such as when cash from the marital pool is used to buy a home), this only counts assets that were possessed at the time of separation.
What is considered as a marriage asset?
Any property obtained during a marriage by either spouse is considered a marriage asset. This can include a broad variety of goods and resources. Read on to find a breakdown of some common questions you might have regarding which of your assets are classified as marital assets.
Is superannuation considered a marriage asset?
Superannuation is regarded by the Court as a marital asset. Superannuation is a component of the asset pool that is distributed in compliance with superannuation fund regulations.
While receiving a smaller portion of the other assets, the contributing member may keep the entire benefit. Alternatively, the couple might receive a “splitting order” from the court that distributes the money into equal portions for each party. A “flagging order,” which would direct the transfer of a predetermined amount to the other spouse upon the superannuation fund’s maturity, may also be issued by the Court.
Is a Trust considered a marriage asset?
Unless one spouse has retained complete control over the trust, the Court will treat assets held in a trust as joint assets, just like it would any other marital asset. The Court takes into account whether either spouse has received a loan, a salary, or other benefits from the trust. They will also review the past transactions and the parties’ past handling of the trust.
Are inheritances considered an asset?
The most crucial element in determining whether an inheritance qualifies as a marital asset is the time of the bequest. For instance, an inheritance received by one spouse prior to the couple’s divorce could be viewed as the recipient’s financial contribution. This is more likely to be the case if the family used the bequest to pay for things like vacations, house improvements, and a mortgage decrease.
An inheritance obtained early in life could not be significant when taking into account other contributions made throughout the marriage. Unless the asset pool is too small to ensure a fair settlement for both parties, an inheritance received later in a relationship or after separation is rarely included in the asset pool.
How does the Court treat windfalls?
Windfalls are unexpected, unearned gains that one spouse might receive during the marriage. Examples include lottery winnings, gambling wins, inheritance, or a large financial gift.
In most cases, any windfall that one spouse receives—for example, from winning at the casino—is typically regarded as joint income and is included in the couple’s asset pool.
Find Out How Quill Legal Can Help
Seeking legal advice early in the process is advisable to navigate complexities and ensure a fair division of assets. Contact Quill Legal today for expert guidance on navigating your property settlement and protecting your interests. Call us at 02 8999 3743 or book your FREE initial consultation.
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