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.
- There has to be research into how much each party contributed to the maintenance of the assets. This can be difficult if, for instance, there is a family business that both partners worked in. The same goes for superannuation and many other assets if both contributed to them.
- Any calculations must certainly take into account the future needs of both parties. Who has the most income earning ability? Who will the children go to? There is a cost of both finances and time involved in that. The health of each party must also be taken into consideration.
So at the end of the day, any split is not likely to be 50/50, although in some cases it may be deemed fair, if all the different elements add up to that. It is important to get advice from a lawyer who specialises in divorce settlements so that you can be sure of getting a fair share of the assets. Settling for a 50/50 share is quite possibly going to leave one party out in the cold with less than they are entitled to.
No one ever thinks that a divorce will happen to them when they decide to marry. The truth is that it happens far more often that anyone likes. The only thing to do when things fall apart irrevocably is to make the best of it and go with the legal advice you are given.