When it comes to splitting assets in divorce, there are several things your family lawyer should discuss with you. These include what is counted as an asset, how the property settlement process works when it comes to splitting assets in your divorce, and how to reach a fair and equitable split of your assets after you have separated.
Our family lawyers in Perth answer these questions and discuss what you need to know about splitting assets in divorce in Western Australia.
Splitting Assets in Divorce
What Are Classed as Assets in Divorce?
Everything that is owned by a couple can be reviewed and classed as an asset to go into the family asset pool to be split as part of the property settlement for your divorce.
It may come as a surprise for many couples that it does not matter if the asset is registered in only one party’s name; it can still form part of the asset pool.
Your family lawyer should also look at whether the assets were acquired before or during the marriage or even after the separation – assets from any of these time periods may be classed as part of the asset pool.
Assets may include the family home, any other properties such as investment properties or holiday homes, businesses, vehicles, cash on hand, bank accounts, investments, insurance policies, household items, superannuation, and any inheritances received.
Debt of both spouses, no matter in whose names they are a registered can also go into the asset pool and will be considered as well when it comes to the property settlement. This may include things like a mortgage, personal loans, tax debts, credit card debt, or loans from family members.
In cases where a Binding Financial Agreement (BFA) is already in place, certain assets may already be listed as being excluded from the asset pool on divorce.
The Property Settlement Process
Australian Family Law requires the splitting of assets to be fair and equitable, but that does not simply mean that everything will be split straight down the middle.
The property settlement process begins by both spouses providing disclosure of their financial position. From there, a list of assets and liabilities is prepared. The next step is to have these assets accurately valued. It is important to note that should it be discovered at a later stage that a spouse had deliberately failed to disclose an asset, or deliberately valued an asset inaccurately, the split could be adjusted and it could also have serious legal implications for that person.
There are several factors that are usually considered when it comes to property settlement in a divorce. These may include:
- The length of the marriage
- The individual contributions by both spouses, including financial, non-financial, and parenting or homemaker contributions (keeping a home, raising and caring of children, etc)
- Age and health status of both spouses and the children
- Earning ability and future needs of both spouses and the children
Australian Family Law recommends that both spouses work together to decide for themselves how to best divide their assets and encourages them to negotiate and reach an agreement that suits their family’s specific needs. This is usually achieved through family law mediation.
It is well known that the property settlement process can become a highly emotive and fairly complex matter to handle, leading to much dispute. We recommend that you seek professional legal and financial advice when negotiating a property settlement after separation, in order to achieve a fair outcome for both you and your children.
How To Decide On An Asset Split
The Family Court requires parties to engage in “Pre-Action Procedures”. Those procedures include exchanging disclosure, and attempting some form of dispute resolution to see if matters can be resolved.
Family mediation is often the quickest and least costly way to split assets in a divorce, as opposed to going through the Family Court.
A family mediator should guide both parties throughout their negotiations towards reaching a property settlement, on which they both agree. During the negotiations the mediator may also make suggestions for them to consider, such as exchanging one asset for another while ensuring the overall splitting of assets remains fair and equitable.
Should they come to an agreement, the family mediator can then further assist the couple by making their agreement legal, by assisting with submitting the signed agreement to the Court for a consent order.
Should they fail to reach an agreement on splitting their assets, they will have to take the unresolved matters to the Family Court, where a Judge will make the final decision. That however can be an expensive, stressful and drawn-out process taking months, and sometimes even years, to finalise.
Here at Hickman Family Lawyers in Perth, we believe there’s a better way to do family law. We don’t want to drag your divorce out for any longer than needed. We don’t want to charge you sky-high fees. We aim to settle your matters quickly, and amicably, because we want to best outcome for you and your family.
Book your free 15-minute information call with one of our knowledgeable and compassionate family lawyers in Perth now.
