During most relationships, assets and incomes are jointly pooled together to try and achieve financial security for the benefit of the family. Upon separation, joint finances need to be untangled and divided to cause an outcome which is “just and equitable” or in other words “fair”.
The most commonly accepted way to decide what is a fair division is the three or four step process.
The initial consideration is whether or not there should be an order made to alter the existing interests in property at all. Sometimes it is appropriate to just leave the interests in property without any alteration. Other times, an alteration of any interests in property might cause unfair outcomes or unintended consequences.
If it is just and equitable to alter the existing interests in property, the first step is to identify and value the existing assets and liabilities of the parties. All parties involved in the dispute must give full and frank financial disclosure of their financial circumstances until the case is resolved. All assets, liabilities, and financial resources are identified and valued. If values are not agreed, then proposals and valuations are arranged from suitably qualified professionals.
Once the asset pool has been determined, the second step is to look at the past and assess the various contributions of the parties towards the achievement of the currently existing assets and liabilities.
The third step is to consider the future under a range of specific factors and assess whether an adjustment to the contribution determination is needed and warranted in favour of one party.
The wholistic outcome of the assessments under the second and third steps are used to decide how the existing assets and liabilities are fairly divided between the parties. From time to time, issues such as maintenance and child support are also considered before a final order is made.
The shorthand summary of this process is “what do you have, what is it worth, and who gets to keep what”.
The outcome of each case depends on its own unique facts and circumstances. There is no presumption of equality when dividing property, in rare circumstances it is fair for one party to receive most to all of the available assets, and on occasion the only way to cause a fair outcome is for one party to receive over 100% of the available property.
If you and your former partner are both legally represented, you will be expected to attempt mediation together before commencing proceedings at the Family Court of WA.
If you and your former partner cannot reach an agreement about how to divide your property fairly between yourselves, a Magistrate of Judge at the Family Court of WA will decide for you both after a final hearing. You will have an opportunity to present your case. Your former partner will also have an opportunity to present their case. But ultimately neither of you will have any control over the outcome. Although you can reach an agreement between yourselves any time up until reasons for decision are delivered and final property orders are made.
Agreements can be reached outside of the court system through informal negotiations, mediation, or arbitration. Agreements are then either formalised through a Form 11 Application for Consent Orders or Binding Financial Agreement. If an agreement is not reached through negotiation or there is an important issue which needs urgent attention, it may be necessary to file an application at the Family Court of WA.
Please feel welcome to contact Michael Klimek to discuss the division of your assets and liabilities in further detail by email at email@example.com or phone on 08 6141 3227.