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Divorce & Property Settlement: 50/50 Split?

Mar 12, 2024

During a divorce, one of the most pressing concerns for many couples is the division of their assets. Popular misconception dictates that this process results in an equal split, with each party walking away with half of the shared property and finances.

However, the reality of how assets are divided during a divorce and property settlement is far from this simplistic view. The division of assets on separation is governed by the Family Law Act 1975, and it takes a more nuanced approach, aiming to achieve a distribution that is just and equitable based on the circumstances of each case. 

This article will explore the complexities behind the division of assets, explaining the inaccuracy of the myth of the “50/50 split” and shedding light on what individuals can expect during the settlement process.

Understanding the Family Law Act 1975

The “just and equitable” principle ensures that the distribution of assets considers each case’s unique circumstances, aiming for a “just and equitable” outcome rather than an automatic 50/50 split.

The concept of what is “just and equitable” is complex and involves several considerations. The court examines various factors, including but not limited to both parties’ financial and non-financial contributions to the relationship and the assets of the relationship, as well as the future needs of both individuals. This approach allows for a tailored division of assets that reflects the contributions made by each person and their post-divorce requirements, which may include caring for children, the ability to earn an income, and other relevant factors.

How Assets Are Divided

The division of assets in a Queensland divorce or separation involves a detailed and structured process.

 

Step 1: Identifying and Valuing the Asset Pool

The first crucial step in the asset division process is to identify and value all assets and debts belonging to both parties. This includes everything from property, cars, and investments to superannuation, business interests, and debts.

The goal is to compile a comprehensive list of these assets and liabilities, accurately valuing them to establish the total net asset pool available for division. This step may require professional valuations for certain assets like real estate, businesses, or unique personal property to ensure accuracy in the process.

Step 2: Assessing Contributions

Once the asset pool is established, the court then assesses the contributions made by each party towards the accumulation, conservation, or improvement of these assets. Contributions can be financial, such as income, savings, or inheritances, which are applied to accumulating, preserving, or improving assets.

Contributions also include non-financial contributions, like weeding, gardening, mowing, cleaning, or other maintenance of a house, parenting responsibilities, or efforts to improve a family-owned business. The aim is to recognise and quantify the value of these contributions in both monetary and non-monetary terms, ensuring that each party’s role in building marital assets is acknowledged.

Step 3: Considering Future Needs

The next step involves considering the future needs of both parties. This includes a wide range of factors, such as age, health, income-earning capacity, the need to care for children, and the overall financial resources of each party. This step is crucial for ensuring that the division of assets takes into account the potential for financial disparity between the parties post-divorce, aiming to mitigate undue financial hardship and promote financial independence.

 

Step 4: Arriving at a Just and Equitable Division

Combining the assessments from the previous steps, the court then decides what constitutes a just and equitable division of the marital assets. This decision is based on the entirety of the circumstances, including the contributions made by each party and their future needs. The outcome can vary significantly from one case to another, reflecting the unique dynamics and needs of each relationship.

Common Misconceptions

One of the most prevalent misconceptions about divorce settlements in Queensland, and indeed throughout Australia, is the belief that assets are always divided equally. As we’ve already explored, this is not the case.

Some other misconceptions include:

  • Assets Held in One Name Are Not Part of the Asset Pool: Many people mistakenly believe that if an asset is in one partner’s name, it will not be considered for division. However, all assets, regardless of whose name they are in, are considered part of the marital asset pool.
  • Superannuation Is Excluded from the Asset Division: Superannuation is often thought to be separate from other assets – that is not true, superannuation is property and can be split between parties, just like any other assets.
  • Contributions Are Only Financial: “If I paid for everything, then I should get everything” – wrong! Non-financial contributions, such as homemaking, child-rearing, and emotional support, are equally valued and considered.
  • Once Divorced, Assets Can’t Be Divided: This is not entirely true – you have 12 months from the date of the divorce to divide your assets.  If you do not, a Court will ask you to explain why their should be any division of assets at all.  They will allow that to occur, if you have  good explanation.
  • All Assets Are Split, Regardless of When They Were Acquired: Assets acquired before the relationship or after separation can be treated differently, depending on the circumstances.

Get Advice from a Family Lawyer

Navigating a divorce and the subsequent division of assets is a complex and emotionally taxing process. As we’ve explored, the division assets is not “one size fits all” but is instead tailored to the specific circumstances of each case to ensure a just and equitable outcome.

Given the intricacies of family law and the potential for significant variation in outcomes based on individual circumstances, understanding and navigating the division of assets can be challenging. This underscores the importance of getting legal advice from a professional who can provide personalised guidance tailored to your situation.

Consulting with a family lawyer is not just about legal representation; it’s about equipping yourself with the knowledge and understanding of your rights and obligations under the law. If you’re looking for a QLD-based divorce and family lawyer, contact The Legal House obligation-free to discuss how we can help.

Nick Harrison

Nick Harrison

Founder & Solicitor

Nick is passionate about family law, domestic violence, and wills and estates, Nick has been practising as a Solicitor of the Supreme Court of Queensland and the High Court of Australia since 2012.  He provides practical legal advice to his clients, using his unique blend of impeccable legal skills and real-life experience as a police officer, husband and father.

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