It is a widely held, but quite incorrect, view that in a property settlement between a husband and wife that the assets will usually be divided more or less equally – the 50/50 split!
This myth most likely exists because we consider it a goal of a property settlement for each party to be treated equally, that is each party should have an equal share of the property within the relationship.
In fact, the Family Court does not have a universal equation, simple or otherwise, that it applies when determining how the assets of a relationship should be divided.
However, we can identify four key factors that the Family Court does consider when dealing with property settlement matters. These factors include:
- The length of the relationship;
- The financial contributions of each person to the relationship to the accumulation of assets;
- The non-financial contributions of each person to the relationship;
- The current and future needs of each person; and
- Whether it is “just and equitable” to make an order.
Differences in each of these factors can easily change the equation from a 50/50 split to more in favour of one party than the other.
- A short relationship may result in an uneven property settlement if one party made a large initial financial contribution to the property pool.
- A financial contribution by one party that is much larger than the other may be offset by a larger non-financial contribution, for instance where the care of children is involved.
- A party who has always made a larger financial contribution may receive much less than a 50% share if the other party has sacrificed their career and will find it difficult to provide for themselves in the future.
Rather than proceed with a simplistic 50/50 split, the Family Court will try to do what is fair between the parties based on their specific circumstances. It’s easy to see when you consider it in detail how quickly that might depart from a simple 50/50 arrangement.
If you have any questions about property settlements for yourself or in relation to a client you are advising, please contact a member of our family law team for more information.