We Don’t Have Much – Can’t I Sort Out The Settlement Myself?
When people separate and begin to consider the financial details of a split, things might look pretty simple on the surface. A quick glance shows that there might be ‘just’ a house, a car or two, and a few other miscellaneous items owned by a couple. Piece of cake, right?
Yes – it is possible that a property settlement will sometimes work out quite simply, with no major hurdles in assessment or division. Yet even with an honest appraisal of your shared finances, there can be more than meets the eye within a couple’s financial situation.
And unfortunately if post-separation emotions begin to peak around who should get what, sorting out the financial details by yourself can end up rather problematic. As a benchmark, it can help to look at how the courts will likely view your financial reality.
Seeking an accurate financial picture
Not much to consider financially? You might need to think again! Have you thought about assets in the broadest sense – not just items like a house or land, but less obvious things that together can make a difference to the overall financial picture? Think jewellery, superannuation, gifts, savings, furniture, machinery, tools and artwork – just as examples. Following from this, the level of shared debt is vital to consider, so that a fair divide of the net pool can occur.
Whether you are seeking consent orders or a financial order for the fair division of assets, it is vital to seek professional help on the best way to account for your existing pool. You might just be surprised at how much has accumulated during the relationship! A fair division can only occur once a clear picture is drawn.
And this is only a broad-bush illustration of the possible financial details you need to consider. The idea isn’t to stress you with the thought of all this detail – but we do want to make sure that you are seeing the whole financial picture.
Assessing the give and take
As well as looking at net assets, you and/or the courts will need to work out the contributions made during the relationship. This includes not just direct and indirect financial contributions (such as mortgage payments or rates) but also non-financial contributions.
This can be a tricky task, especially if you disagree about how much value should be given to tasks such as childcare and housekeeping. An experienced family lawyer has up-to-date information at hand regarding the best way to value a wide variety of contributions that occurred within the relationship.
Let us assume that your and your ex-partner have been able to agree upon the size and nature of existing financial resources, as well as a fair assessment of contributions. In your mind, you might feel quite sure that a fair division will be a cinch. But what if your ex-partner thinks that you don’t deserve a slice of that cake which is… shall we say… rather on the skinny side?
In terms of how existing assets should be split, courts will take account of what the future is likely to entail for both parties. By this, we mean they’ll be interested in the likely trajectory of childcare duties, ability to work, existing qualifications, medical issues, educational plans and any other factors likely to impact upon the future earning potential of both you and your ex.
Thus, a division might not be seen as fair where one has a greatly diminished future earning capacity due to illness. Or, the time needed to retrain in a viable career might require an increased slice for one party or another to enable this transition.
Preparation is key
At the end of the day, your financial situation might be such that you can both sort things out with minimal fuss. Yet is important that you consider issues such as total assets, past contributions by the parties, plus what the financial future might hold for both of you.
Prepare for discussions with your ex-spouse by obtaining the most comprehensive set of financial documents available. Put some time into drafting a summary of what was contributed (financial and non-financial) during the course of the relationship. And importantly – chat with a trusted advisor about your likely financial situation into the future.
Sometimes people are concerned that they will have to pay big money and go to court if they seek professional help to establish the true financial picture. Just remember that your expert family lawyer can explain the best ways to sort the finances amicably – and without unnecessary fuss. With open discussions and helpful advice, an experienced family lawyer can help find a cost-effective solution to your property division needs.