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How are Assets Divided in a Divorce?

how are assets divided in a divorce

After the end of a relationship, both you and your former spouse have to agree on how you wish to divide up the assets. This way, you can tie-up all the loose ends and move comfortably move on with your lives.

Depending on the nature of the relationship breakdown, this can either be easy (where you are both still on speaking terms and able to reach a mutual agreement) or difficult (where communication has broken down and there’s a sense of resentment on either side). The presence of children can also complicate matters.

Whatever the case, there are many avenues you can go down to get the legal support you need to reach a just and fair outcome. Consulting a divorce lawyer early is a great way to be informed on your legal rights and responsibilities. To book an appointment with McDonnel Schroder, call (0) 9622 1155 today.

First, let’s dispel a few myths in regards to who receives what in a settlement…

Common Myths About Divorce Settlements

These days, there is no shortage of websites and groups dedicated to spreading misinformation in regards to the ‘injustice’ of the divorce settlement system.

As a result, some people walk into settlement with pre-conceived ideas of what the process will entail, how they will be treated, and what they are entitled to ask for. Unfortunately, this confusion only slows down the settlement process and leads to unnecessary infighting between participants.

As divorce lawyers, here are some of the most common myths we have come across in our professional experience:

Men come off ‘second-best’ in a divorce settlement

Despite the spread of the idea that men come off ‘second-best’ after the divorce or separation settlement, repeated studies show the opposite is often true. Research has shown that the nature of the relationship and value of the assets plays a key role in determining who gets what.

On top of this, there are many other factors that influence how the share of assets is split. This includes:

  1. The shared asset wealth of the couple – Typically, the wealthier the couple, the more complex the share of assets is. Therefore, there is less likely to be an even split, as the amount of contributions each person made was not equal between them.
  2. Their employment status – Research has shown men are more likely to remain in the workforce throughout the course of marriage and after separation. This is especially true if a child is present, as women are more likely to put their career on hold to bear full-time child care responsibilities. As a result, men often have the means to stay financially independent after a divorce, whereas it may take longer for women to comfortably re-enter the workforce.

50/50 splits are a common occurrence

There are no hard-and-fast rules or mathematical formulas to accurately determine the outcome of a settlement. A judicial officer will only reach a decision once they assess all of the evidence presented to them. As this will allow them to decide what is just and equitable based on the unique circumstances of your case.

For these reasons, it is quite rare for a divorce settlement to be an even 50/50 split. There are just too many factors to take into consideration for this outcome to be reached on a consistent basis.

How to Agree on a Divorce Settlement

There are many ways in which both you and a former partner can reach a mutual agreement.

Firstly, you can come to an agreement on how your property should be divided without involvement from the court. This is an ideal outcome if the relationship came to an end on mutual terms, and you’re both comfortable with coming to an agreement that is not legally binding.

However, if you both wish to formalise the agreement – without having to go to court – there are ways to do that as well. Your divorce lawyer may advice you to apply for either:

  1. A financial agreement, or
  2. An agreement formalised by applying for a consent order, where you ask the court to make an order based on the terms of your agreement.

A financial agreement is a formal document used by the courts to lay out the process of financial proceedings in a divorce. It’s an effective way to protect yourself from financial claims brought forward by your former spouse later on. And it lays out in clear, easy to understand terms how each of your assets are to be divided.

This may include, but is not limited to:

  1. Property
  2. Money, shares, and savings
  3. Children and/or spousal maintenance
  4. Division of debts and pensions
  5. Superannuation (although this is rare)

Do Time Limits Apply to Request a Financial Agreement?

Yes. Across all states and territories, the time limit to submit a request for a financial agreement is within 12 months of the divorce being finalised.

However, if you were in a de-facto relationship, you can submit an application within 2 years of the relationship officially coming to an end.

What If You Cannot Come to an Agreement?

If you cannot reach an agreement in regards to the division of your property and assets, there are avenues you can explore.

By far the most effective way to reach an agreement is to go through the family dispute resolution process. This involves both parties attending mediation sessions run by a qualified counsellor. In these sessions, both parties work together to discuss their differences and decide how best to divide their property and assets, and then make the agreement formal and legally-binding.

There are many advantages to dispute resolution. Generally, the process is quicker and far less emotionally taxing than going to court. And you each have the chance to make your own decisions as opposed to let the final outcome rest on a judicial officer.

Best of all? Mediation is offered free of charge by the Department of Justice and Regulation. As opposed to a court proceedings which cost thousands of dollars in legal fees.

When Should You Consult a Divorce Lawyer?

Where practical, you should seek legal advice from a divorce lawyer within 12 months after you separate from a former spouse.

A divorce lawyer can assess the facts of your unique case and advise you on your legal rights and responsibilities. This way, you’ll have a better idea as to what you are entitled to in a divorce settlement, and you’ll have a clear understand of what to expect from the process.

To book an appointment with a fully qualified and experienced divorce lawyer, contact McDonnell Schroder today. Simply call (02) 9622 1155 or send your online enquiry. One of our friendly lawyers will respond quickly to your enquiry.

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