Divorce can be messy. There are no two ways about it. Whether you’re in Australia or any other country, it’s pretty clear that divorce can be an unpleasant process, and this is something that you need to prepare for. Of course, nobody enters into a marriage with the intention of getting divorced, but it’s a reality of the world we live in, and it’s important to ensure you prepare for this. It’s so important to try to keep your divorce settlement as pleasant and stress-free as possible wherever you can.
You need to do what you can to understand how a divorce process can work when it comes to the splitting of assets, as this is a key part of finalising the divorce, and something that can cause a lot of friction. One of the most important elements to consider with this is the settlement of property, and property settlement is one of the most vital aspects of any divorce. Making sure you understand how this process works in Australia is essential for knowing how it is likely to impact you right now.
What is asset separation?
Asset separation is one of the key parts of any divorce settlement, and it’s also the one that can cause the biggest issues. Essentially, as Pearsons define it in their video reference series, the asset separation refers to the size of the cake, and the size of the slice to which you are entitled. Basically, you should think of this process as splitting all of the assets in your marriage out between the two of you. However, it is important to remember that this is never as simple as just a 50/50 split, and there is plenty you’ll need to account for when gearing up to tackle this process. The division of assets can become highly toxic in a divorce, so it is important to try to remain on good terms as much as possible.
What does ‘property’ entail?
The other thing you need to be aware of is what exactly the term ‘property’ means when it comes to property assets. Simply put, property can refer to anything including the marital home as well as investment properties that might be owned by either party. Now, when it comes to the marriage home, which is the main property of concern for a lot of couples facing divorce, it is important to know what your rights are, and how any division of this asset might be calculated.
The marital home
When assessing the marital home, it will be important to make sure you get a valuation of the property so you understand how much it is worth. No matter whose home the property is in, it is an asset that will at least be under consideration during a divorce settlement, and this is something to be aware of.
Getting a valuation
Okay, so this is an important step in the process, because you need to know the value of the marital home. So, one of the most important things to account for is the fact that you will need to contact some agents in order to get a valuation on the property. Now, something that you need to be aware of is that the value of the home at the time of settlement is what is taken into account, not at the time of separation. This is one part of Australian settlement law that many people don’t take into account, and you need to be aware of this.
The 4 steps of Australian property settlement
Property adjustment in Australia is done via a 4-step process, and understanding these 4 steps is vital for understanding the division of assets, as well as being able to reach a satisfactory agreement. So here are the 4 steps in the process that you need to be aware of right now.
1. Assets are identified and valued
This is something that will be done regardless of whether or not the property was acquired before or during the marriage, or even after separation. This is something that a lot of people disagree with, and it might seem unfair in many ways, but this is the process. So you need to make sure you are prepared for this as much as possible before the process begins.
2. Financial and non-financial contributions are assessed
Once the valuations have been made, the next step in the process is for the contributions of each party to be taken into account. Financial contributions are self-explanatory, while non-financial essentially means any direct or non-direct contributions to the acquisition or improvement of any property belonging to both or either of the parties.
3. Future needs of the parties
It is also essential that the future needs of both parties are taken into account. And this is done by assessing a myriad of factors, including age, heath, income, and many more. These are factors used to take everything into account and reach a settlement verdict. Percentage adjustments can be made in situations in which one of the parties has to care for children and this can impact their ability to earn.
4. Practical effects
There are many things that should be considered when it comes to this, and the practical effects of any proposed settlement will be kept in mind. The way things typically go in Australia is that the property settlement will result in a 55-65% settlement in favour of the economically weaker spouse, and this is the sort of thing you can expect to happen in your case, though this is not always the way it goes.
As you can see, there is plenty to consider here, and it is definitely worth hiring a lawyer to take a look at this for you and help you understand how it works. The division of property following divorce in Australia is not a 50/50 process, and there are several factors to consider with this. Being able to make the perfect choices to help with this in the future is so important, and that’s what makes this a valuable guide.