NSW What is a Fair Split of Property Settlement?

[TammyNorman]

Hello,

My husband and I are recently separated. We have been married 26 years, and have two children, 13 and 16. I have sole custody of children and care of the boys due to my husband's constant travel.

We are quite amicable, but I just want to make sure we are being fair for one another in regards to property settlement, given our circumstances. I am 51 and he is 55. We don't own a home, so we don't have to split that.

We have a small amount of joint savings, about $65,000. We also have separate savings of about $20,000 each. We will both keep our own savings, and split the joint account. I'm not sure what the split of the joint account should be?

We also have superannuation totalling about $600,000. Not sure what the split should be?

I brought about $150,000 into the relationship 27 years ago, while my husband had no cash. We were able to buy our first home with my cash. Unfortunately, we lost our home a number of years ago due to my husband's business struggles and he forced us to sell the home. So we lost my cash.

We both work full time. My salary is about $50,000 per year, and my husband's salary is $250,000.

I don't earn enough to reasonably pay for my new rent and family expenses for our children, so I have been told that I could reasonably ask for Spousal Maintenance given he earns five times my salary. I need to rent a 3 bedroom home, but he only needs to rent a one or two bedroom home. Big difference in rent!

I know I can apply for Child Support, and based on Centrelink calculator my husband will need to pay at least $3,190 per month. But I still can't afford rent and living on my salary.

As I came into the relationship with $150,000, is it fair that my husband needs to continue to support me and the children by way of spousal support?

I am so scared about my future. My husband was always the one who earns more and looked after our family. I just don't know how I'm supposed to live week to week until I can access the superannuation.

So I guess I just want to know what the fair split should be for superannuation and joint savings. And also what sort of spousal maintenance I should receive and for how long he needs to pay this.

Thank you,

 

[AllForHer]

So, there aren't any rules about who gets what and how much in a property settlement, so it can be whatever you and your ex agree to.

If you were unable to reach agreement and had to ask the Court to decide, it would follow a four-step process:

1. What's the total value of the shared asset pool?
2. What were the financial and non-financial contributions of each party?
3. What are the future needs of each party?
4. Is the settlement just and equitable?

So, all of the assets would be valued at the time of settlement (not separation), and they would be considered as a single pie, rather than various pieces thereof (which is subsequently why it's better to negotiate a settlement outside of court - you can consider each asset individually, rather than collectively).

So, the longer a marriage, the more inclined the Court is to consider your contributions equal. Yes, you brought $150,000 into the marriage, but that was 27 years ago, and that asset doesn't exist anymore, so it won't be given a lot of weight. What the Court would be more inclined to look at is the fact that the husband was the primary breadwinner (financial contribution) and you (I assume) were the primary carer for the kids (non-financial contribution). The Court doesn't necessarily give more weight to financial contribution over non-financial contribution in those circumstances because it won't disadvantage a stay-at-home parent who didn't work in order to keep the family unit functioning at a home level. Realistically, this might be considered close to an equal contribution from each party.

If you have care of the kids moving forward, however, that is considered a future need and will probably see to you gaining slightly more from the asset pool.

Now, superannuation that is split as part of a property settlement is still subject to the laws of superannuation, namely that you can't access it until the age of retirement. Whatever you decide to settle on from that $600,000 will be transferred from that super fund to yours. It won't be granted to you as cash funds.

So in terms of property settlement, I think you could safely aim for 60/40 in your favour, potentially 65/35.

Spousal maintenance is a different kettle of fish because it is not an entitlement, meaning you either need his agreement or you need an order from the Court.

The general principle for spousal maintenance is whether you are able to meet the reasonable costs of living on your own, and failing that, your ex's capacity to pay spousal maintenance to you to enable you to meet those reasonable costs of living.

The considerations are many, but for brevity, the Court looks at age, health, capacity to work, reasonable costs of living, etc. The full list is in s 75 of the Family Law Act - FAMILY LAW ACT 1975 - SECT 75Matters to be taken into consideration in relation to spousal maintenance

Note that it's your reasonable costs of living that the Court takes into account, and it's his ability to pay that comes into the equation, so comparing your needs with his needs is a redundant process. If the father wants to get a five-bedroom apartment, he is at liberty to do so even if he doesn't need a place that big, and that will directly impact his capacity to fund spousal maintenance.

Where I think you'll have difficulty supporting the case for spousal maintenance is that your income plus property settlement plus child support is a fairly sizeable source for covering reasonable costs. Of course, it won't match his, but that isn't what spousal support is for. It's to help you find your reasonable costs, not balance your respective standards of living.

But in the same token, who knows? Maybe he will agree to pay spousal maintenance and it won't require the rigmorale of Court regardless. You should definitely try and negotiate it, in any case.

 

[TammyNorman]

Thank you very much for all of your help.

This all makes sense.

I know that spouse maintenance is not there to balance out our living, but I am genuinely nervous about being able to meet our family expenses.

I feel that my husband has abandoned the family and not wanting to care for us in the way that we used to live as a family. I guess this is the sad reality of divorce

Fingers crossed we can resolve this without going to court.

Thanks again,

 

[TammyNorman]

Hello again,

I just have one more question. My husband has had a new girlfriend for some time now, and she owns her own home outright. Although this home is in the US where she currently resides.

Some friends have told me that after a certain period of time (6 months?), if we have not settled our agreement, that the girlfriend's assets comes into play when working out our asset split. Is that right?

Thank you,

 

[AllForHer]

The shared asset pool comprises only of assets in which you and your ex have a joint interest - that is, you and your ex must have benefited from it in some way during the marriage.

You won't have gained any benefit from her home during your marriage, so it won't be considered part of the shared asset pool.

There might be an exception of he's used marital funds to pay off her mortgage, but in that case, you're more likely to have those funds added back to the asset pool than to have her home included entirely.

 

[TammyNorman]

Ah, yes of course. I don't think he has helped with her mortgage at all.

Makes sense.

Thanks again!

 

[Bonnatsitah]

Ah, yes of course. I don't think he has helped with her mortgage at all.

Makes sense.

Thanks again!

Hi Tammy,
I’m currently going through a separation and resonate with your post. Just wondering how it has all panned out for you?
Any words of encouragement would be appreciated. Its a scary time.