Assets & Property Settlements – what you need to know
By Angela Tondelstrand, Partner
In this blog, I dispel a commonly held myth about what assets (or more importantly the value of assets) will be taken into account in a property settlement between a separated couple.
I’m often told to take into account the bank accounts, superannuation, and credit card balances of the parties by drawing a line in the sand at the date of separation. I also occasionally face the emphatic position of a party who says that any assets accumulated after separation aren’t relevant, and any debts after then shouldn’t be taken into account either.
Why this is not the case
In family law property settlements, a division of assets is determined on the value of the assets at the time of the agreed or ordered division.
Parties could be separated 10 years or more (and I’ve experienced a few cases where they have been) but not formalised a settlement, and therefore despite having led fairly separate lives and accumulated significant assets (or debts) since that time, it is the post 10 year value that will be taken into account.
Drawing a line in the sand
Thus it could be said that there is no real line in the sand, but rather a series of attempts to stop the flow of that sand through the hourglass by determining the current values at one point and agreeing on the outcome before the values change again.
Whilst this may seem like an injustice of our family law system at first blush, all is not lost because significant contributions by one party to an asset of either or both parties post-separation may result in an increased percentage of the overall entitlement to that party.
Similarly, if there is significant wastage (that meets the requirement of being “negligent, reckless or wanton”) by a party of assets post-separation that diminishes the assets of the parties post-separation, that could be relevant too, and reduce the percentage entitlement of the waster.
Getting advice after separation
However, arguments about what has happened post-separation, the benefit or fault, and the percentage adjustment that results, is often the subject of significant dispute between parties (and their lawyers) resulting in increased legal costs, uncertainty, and delays.
It is essential to obtain advice about your entitlements early and as soon as possible after separation. You may not be ready to proceed with negotiations, and that’s okay, but you should find out what effect delay could have before weighing up when is the best time for you.
For a complimentary and obligation-free consultation with one of our accredited specialist family lawyers, contact Catton & Tondelstrand on 5609 4933.