As family lawyers, we see a lot of people struggling in relationships because they are worried about the financial outcome of a separation after a long marriage. But what many don’t know is that the Family Courts are more likely to split property more evenly the longer you have been together.
More than a quarter of separations and divorces happening now involve partnerships of more than 20 years. In the 1980s, those longer term relationships made up as little as 12-13 per cent of separations, according to the Australian Bureau of Statistics.
With divorce rates for long-term couples on the rise, it’s more important than ever to be aware of the impact a long relationship can have on how the law treats your property in the event of separation. It may also change the way you feel about staying in unhappy partnerships later in life.
Each case is treated individually, so there is no blanket rule to say how a division of property must occur. The Family Law Act takes several things into account when looking at how to divide your assets. These include:
Over time, the nature of your assets may change. Your children grow up, retirement looms and superannuation nest eggs become more significant, all of which may change the way your property settlement looks.
For example, a superannuation interest while it’s in the ‘growth phase’ is treated as a lump sum amount (capable of being split to you or your former partner), while a superannuation interest in the ‘payment phase’ may either be treated as a lump sum or as an income that is not part of your asset pool, but rather as an adjusting factor that will affect your future financial needs.
Similarly, the timing of a decision to retire can have a significant impact on how the asset pool is split. Receiving a redundancy payment, deciding to change your income and/or changing the way that your superannuation might be used can also have ramifications in the case of divorce.
While you may have made retirement plans during your relationship, it’s worth revisiting your approach to retirement if you are considering or going through a separation. It’s good to understand the pros and cons of these decisions to change how your assets are looked at in a property settlement prior to progressing a decision to separate.
The longer your relationship is, the less likely a court will be to take a mathematical approach to assessing the contributions that you have each made to the property that you own. This means that in a 20-year relationship, a court will be less concerned about ‘who paid for what’ during the relationship – or going through bank statements to look at what you have each paid towards the groceries and other living expenses.
In fact, the longer your relationship the more likely the law is to treat your contributions to your assets as being equal during the relationship. This means that stay-at-home parents or carers will be seen to have contributed equally to a primary breadwinner. As with anything when it comes to the law, there are always exceptions to this rule, however. For example, lump sums that you or your former partner may receive by way of a gift, inheritance, redundancy or compensation payment can be treated differently.
The law recognises there are a lot of other things that will influence your situation.
Your age and state of health will be considered as well as your ability to find employment, even the extent to which your relationship has affected your earning capacity. So, if you were out of the workforce caring for your minor children or your spouse, the impact of this on your ability to earn an income will be considered as well as any retraining required to get you back into the workforce.
If you have moved on with another relationship, this will also come into consideration, as well as the financial circumstances of the new partner.
Every case is different, so we always advise people to seek expert family law advice that is tailored to your individual circumstances and remember that meeting with a family lawyer is always a confidential process.
IMPORTANT LEGAL INFO This article is of a general nature and FYI only, because it doesn’t take into account your financial or legal situation, objectives or needs. That means it’s not financial product or legal advice and shouldn’t be relied upon as if it is. Before making a financial or legal decision, you should work out if the info is appropriate for your situation and get independent, licensed financial services or legal advice.
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