One misconception family lawyers often to have to correct their clients on with regards to a divorce or separation is the law as it relates to the division of property.
Due to high levels of misinformation, rumour, and in many cases, outright falsehoods, people’s misconception of what they or the other party are entitled to, is often way off the mark. Here are some of the misconceptions we hear most from clients.
‘Only The Courts Can Decide A Property Settlement’
You might be shocked to learn that in Australia, 95% of divorcing couples manage to agree on the property settlement, without the need to go to court. They may use a mediation service, and each may employ the services of legal professionals, who may act on their behalf during the negotiations.
Ultimately, if they can reach an agreement, and mutually endorse the settlement negotiated by their representatives the two people being divorced need never step inside a court. All the court needs to do is review and approve the Application of Consent orders that the two parties have agreed to.
‘Everything Will Be Divided 50/50’
Despite there being two parties to every divorce, family law states nothing about adding up all their total assets and property and then dividing it all by two. It may seem a lot simpler for all concerned to do it that way, but the calculation made takes a lot more into consideration than just how many people are getting divorced.
If it goes to court, there are a number of discretionary awards that can be made as part of the overall settlement, and many of those are defined in the Family Law Act of 1975.
Despite what you may think, the rules with regards to property settlements are not set in stone, and a court will determine what each party is due based on the evidence in front of it, and in each case, that will be different.
‘The Wife Always Gets The Lion’s Share’
This is another myth, which, unfortunately, is given fuel in certain publications and websites. There is no rule that says the husband has to lose and the wife has to win, and as we have mentioned already, in court, every case is determined on its individual merits.
Part of the misconception that men are treated poorly is undoubtedly due to the fact, that, in most cases, it is the mother who has custody of the children of any marriage.
It follows, naturally, that any financial settlement will take that into account when dividing assets and financial support. This might make it seem like wives get the better deal in divorce settlements, but only when children are involved, and if they live with her.
Five Steps Of The Property Settlement Process
Step #1: Calculate the total value of all assets, property, and superannuation. This is done regardless of whose name is on them.
Step #2: For full transparency, all financial documents relating to the items identified in step #1 are exchanged between the parties.
Step #3: Establish the level of contribution each party has made directly or indirectly to the total property pool, and calculate that as a percentage of the total value
Step #4: Assess the future financial circumstances of each party, taking into account their age, length of the marriage, health, earning capacity, custody of the children, earnings sacrificed to care for the children etc.
Step #5: With an agreement, Application for Consent Orders will be considered for fairness and approved by the court. If no agreement, the court will decide upon the property settlement.