Many people go through the trauma of divorce and a large part of the bad feeling is due to deciding what a fair property settlement is. Mostly, the two who are divorcing cannot agree on this question and it must be left up to the family lawyers to decide, or the courts, if an amicable settlement cannot be decided on.
It is often assumed that a 50/50 share of all assets and debts would be the fairest solution, but it is not that easy. For a start, one party may have had a lot of assets – or a lot of debts – before they even got married. It hardly seems fair that their ex-spouse has to be responsible for half of that. Then again, one partner may have received an inheritance or compensation for injury, so is the other party entitled to a share of that?
In their legal framework for working out a fair divorce settlement, the Family Law Act never assumes that a 50/50 split is fair. In fact they actually state that it is very likely that such a split would not be fair because there is too much else to consider.
- The assets and debts have to be correctly identified and valued to start with and often there is non-disclosure by one party that is difficult to get around.