What Is the Legal Property Division Process, in the Absence of Pre-Nuptials?

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What Is the Legal Property Division Process, in the Absence of Pre-Nuptials?

9 November 2016
 Categories: , Blog

When two people enter a relationship, they will frequently look at everything through rose tinted glasses. They may never see problems down the road and as a consequence may not consider the legal ramifications of mingling their lives together. In an ideal world, they would consult solicitors to help them draft "pre-nuptials" which would detail how property would be divided in the event of separation. While these agreements are usually legally binding and enforceable, things get a lot more complicated in their absence. What are the options in this case?

Applying for Settlement

Unfortunately, many separations end in acrimony. In this case, it's often difficult to look at things logically and calmly and agree about property division. When agreement cannot be reached applications for property settlement have to be lodged with the court. This will usually be a family court or the Federal circuit court.

Arbitration, If Possible

In most cases, it is still possible to negotiate and seek the help of arbitration to help reach a settlement before needing to go through the onerous process of actually achieving a court judgement. If this is not the case though the court will need to make a decision, which will first require a hearing in front of a judge.

First Things First

The first step is to attribute value and identify the particular assets and financial resources of both parties, together with their liabilities. In many cases this can be quite a complex exercise and may involve specialists being brought in to help determine the actual numbers.

What about Contributions?

Next, the individual contribution made by each of the parties has to be determined to see what, if any, indirect or direct financial contributions were made towards the value of the properties. The court will want to consider what contributions were made to the family unit as a whole by one of the parties, either as a parent or as a homemaker.

Were Contributions Equal?

The court will generally start from the basis that both parties have made equal contributions, especially in the event of a lengthy relationship. But in the case where the relationship was not very long then much emphasis will be placed on the direct financial input by both parties and whether or not one of the parties had a lot more assets than the other. The behaviour of both parties will be assessed to determine whether one of them was particularly reckless in their conduct, resulting in a financial loss to the other.

Assessing the Needs

The next step is to determine what happens in the future for each of the individuals. For example, who will take care of any children, what is the individual capacity for gainful employment, what standard of living can be considered to be reasonable and other factors. This information will help the court to determine whether there should be any adjustment to either of the parties in relation to those future circumstances.

The Final Decision

All of this information is taken into account by the court, who will ultimately determine whether any proposed asset division is equitable to both parties.