Asset Split from property sale

[Charlie44]

Hi,

I married approximately 2.5 years ago (we have no children together, she has 3 adult children from previous marriage, I have two children under 18 from previous marriage). I contributed approximately 46% deposit of the purchase price on the property (purchase price $900k) we now live in. My current wife came into the marriage with minimal assets (business worth $200k, $40k super & 50k credit card debts). The property has increased in value by approximately $200k. Two questions (a) what percentage of the growth in the property are each of us entitled to & (b) can her credit card debts be "minused" off whatever her final amount is that she receives?

 

[Atticus]

Two questions (a) what percentage of the growth in the property are each of us entitled to & (b) can her credit card debts be "minused" off whatever her final amount is that she receives?

Married 2.5 years .... Were you in a de facto before that & if so how long? ... that may alter things .... Generally, a short marriage, ie less than 5 years, is considered short & adds a fair amount of weight to each party retaining initial contributions in a divisions.... Any increase in value over the course of the relationship is generally divided 50/50... Many other factors can come into play but you have no kids together & she seems to have stable employment so that should simply things ... Bottom line though is if she doesn't accept that, is it worth the cost of court or offering a bit extra to settle quick & easy.

Debt accrued by one party during a relationship is tricky... Unless you have solid evidence of 'wastage', ie, gambling or the like it's going to be difficult to have her wear the entire debt ... Also it would need to be fairly considerable to be worth you going to court over.

 

[Charlie44]

Married 2.5 years .... Were you in a de facto before that & if so how long? ... that may alter things .... Generally, a short marriage, ie less than 5 years, is considered short & adds a fair amount of weight to each party retaining initial contributions in a divisions.... Any increase in value over the course of the relationship is generally divided 50/50... Many other factors can come into play but you have no kids together & she seems to have stable employment so that should simply things ... Bottom line though is if she doesn't accept that, is it worth the cost of court or offering a bit extra to settle quick & easy.

Debt accrued by one party during a relationship is tricky... Unless you have solid evidence of 'wastage', ie, gambling or the like it's going to be difficult to have her wear the entire debt ... Also it would need to be fairly considerable to be worth you going to court over.

Hi Atticus,

The credit card debt was brought into the marriage not accrued during the marriage. Does this alter the outcome at all as I would be held financially liable for debt which I did not have any responsibility for.

 

[Charlie44]

Hi Atticus,

The credit card debt was brought into the marriage not accrued during the marriage. Does this alter the outcome at all as I would be held financially liable for debt which I did not have any responsibility for.

This thread from 9 April 2014 seems to contradict your reply. Assets are not automatically divided 50/50. A court must consider many things to determine a fair split. This includes:
- assessing the assets and debts, and their values,
- evaluating the contributions that both parties have made,
- addressing both parties’ future needs, and
- assessing whether the overall settlement is fair.

 

[Atticus]

This thread from 9 April 2014 seems to contradict your reply. Assets are not automatically divided 50/50. A court must consider many things to determine a fair split.

Can't see a link to whatever thread that is, but YES, the court must consider all those things, IF it goes to court & becomes a contested hearing... The court will also consider those things I've mentioned,ie, short marriage, no kids etc

Unless the CC debt is quite significant it's probably not worth arguing over

PS ... you didn't answer if you were de facto before marrying, that may well change things depending on the length & circumstances

 

[Charlie44]

We lived together for 12 months prior to marriage. Credit card debt of approximately 60k brought into the marriage by other party. Thanks.

 

[Dpj]

I reckon the increase in property value will be split like Atticus said. I was in a short marriage and that was the advice from every professional. You'll like get you most of your contributions back with no kids.

What is her business worth today? You say it was worth $200k upon marriage/date you moved in together (that's the date you need to use). If her business has increased in value during the relationship then you could have a claim to that.

 

[Atticus]

We lived together for 12 months prior to marriage. Credit card debt of approximately 60k brought into the marriage by other party

So a total of 3.5 years together .... Should be treated as a short marriage... @Dpj makes a good point regarding any incresae in the vale of he business... Would depend on the type & nature of the business, but if you have a realistic claim, it could be used as some leverage to keep it out of court & you not claiming in exchange for the $60K being accepted as a debt that she should repay out of her share of the agreed division.

 

[Charlie44]

Hi,

Thanks for your replies. I also have a business which I purchased in August 2018 for $506,000 shortly after we moved in together in May 2018. I have a debt owing on this business of $210k and its current worth is $580k. Would the other party have any claim against my business? The other parties business she has had for 14 years and it has not increased in value during our time together.

 

[Dpj]

Imo she would probably have some claim. It's a very short marriage/defacto though. See if you can negotiate a settlement without mentioning business valuations. You could try and claim increase in value of business occurred pre relationship.

I think in your situation, especially if lawyers get involved, they will want to try and split the increase in wealth during your relationship and let you keep your initial contributions.

You may want to say to your ex. You keep everything you brought in. I'll keep everything I brought in. I'll keep the property and pay you 50% of the property gains. Say 'we'll get 3 bank valuations and choose the highest as bank Val's are normally conservative.. As once you start valuing businesses, etc, it starts costing money and could work against you if your business value has increased.