One of the common misunderstandings we come across is “my ex can take half of my house right? Or “can my ex take half of my super?”
The short answer is – that’s not how it works in Australia.
There is no automatic 50% divisions and it won't be of just one assets.
In this article we set out some information about how property division really works
Myth part#1 - only dividing one person's house or super
When property settlement is being undertaken, in most cases, the “property pool” consists of ALL of the assets, superannuation and debts OF BOTH PARTIES. This is commonly referred to as the "property pool".
When we refer to the percentage that a spouse of partner receives, this is of the total net property pool.
When dividing the total net property pool, we can stipulate a percentage that a party may receive from a particular asset. There are several reasons why we might formulate the property division in this way. However, this is still just one part of the division of the total net property pool. The outcome still has to be fair (see below).
Myth part #2 - the percentage is always 50%
It is not automatic that each party receives 50% of the total net property pool.
The law stipulates that the percentage each party receives in property division takes into account;
1. The contributions each party makes to the property pool (both financial and non- financial); and
2. The “future needs” or "section 75(2) factors” for each party.
The Court then considers the overall outcome for the parties and whether the outcome is ‘just and equitable” for the parties.
At the end of this process, it might be that 50% / 50% of the property pool is the right outcome for you. However, it might not be. We strongly recommend obtaining personalised advice about your situation and your entitlement in property settlement.
What if I am in a de facto relationship?
A de facto partner can make a claim after 2 years of living together, if there is a child of the relationship or a significant financial contribution.
The method for determining what each partner or spouse keeps in property settlement is EXACTLY THE SAME whether you are in a de facto relationship or married. While the sections and technical provisions may change, there is no difference in how it is decided.
What if I want to ensure I keep an asset if we separate?
You and your partner or spouse can enter into a Financial Agreement.
Financial Agreements are sometimes called BFA's or Binding Financial Agreements, Prenuptial Agreements, Cohabitation Agreements or Separation Agreement.
A Financial Agreement, by whichever name, is a formal contract which sets out what your property division or property settlement will be in the event that you and your partner or spouse separate. You can specify that if you separate, you keep a particular asset or certain assets (such as a house, superannuation, savings or investments).
Need help?
If you need advice about your situation and your entitlement in property settlement, or if you are worried about a potential claim and want to talk about protecting your assets with a Financial Agreement, contact us for a free 15 minute call or to book a 1 hour appointment for a detailed analysis.
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