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Listen: What’s fair when you split your assets?

Dividing property and assets in separation and divorce may seem like a simple equation, but it gets complicated quickly. A 50-50 split may not always be the best outcome. Listen to find out what factors need to be considered in determining a fair property split. In this episode, we talked to Lauren Patford-Smith of Patford-Smith Legal Services about:

  • the 4-step process of Family Law
  • what assets and debts you should include in your marital asset pool
  • how the length of your relationship and when you acquired assets impact the percentage split
  • how financial and non-financial contributions are considered
  • how the circumstances of your situation over the life of your relationship affect the split
  • what happens when one person has spent time out of the workforce as a primary carer
  • how your needs after separation are considered.

Listen here, or listen and subscribe wherever you get your podcasts.

For more information on property splits, check out the blogs below.

If you know someone who will find this podcast helpful, please share.

The Separation Guide aims to make separation and divorce simpler, more manageable and less stressful. To find out more about how one of our Network Members could support your separation, take our free 3-minute Q&A.

Disclaimer
The information in our resources is general only. Consider getting in touch with a professional adviser if you need support with your legal, financial or wellbeing needs.

Kate Russell

Separation and divorce is a complicated time for anyone, and things can get even more complex when it comes to dividing property. Contrary to popular belief, a 50-50 split may not always be the best outcome. Welcome to The Separation Guide Podcast. I’m Kate Russell, and in this episode, I’ll be learning about what’s weighed up when determining a fair property split.

You may be of the opinion that if you separate, you and your former partner should walk away with what you brought into the relationship. Or you may automatically assume that when assets are split in separation, 50-50 is fair. It might seem obvious to you that there were two of you in the relationship, and even if you may have contributed different amounts financially, it seems right to take half the assets when you split.

But what assets and debts should you actually include in your marital asset pool? Does it matter when you acquired them? And what actually counts as a contribution to your relationship? How are financial and non-financial contributions considered?  Does it matter how long you were together or how your circumstances changed during the relationship? How do periods of time out of the workforce caring for a partner or children affect your ability to earn and, therefore, your needs after separation? How does your age, your health, or your future caring responsibilities change what you need? What does fair actually look like, and who can tell you?

To find out the answers to these questions, I needed someone qualified and experienced, so I spoke with Lauren Patford-Smith, Family Lawyer and principal at Patford-Smith Legal Services. Lauren’s practised exclusively in Family Law since 2009 and has experience across all aspects of property settlement. She’s also an Independent Children’s Lawyer for the Family Law Courts and a Network Member with The Separation Guide.

I started by asking Lauren about her motivation to have a career in family law.

Lauren Patford-Smith

My motivation has always been to simply help people at that started since I was young. I became a lawyer because I watched The Practice and Ally McBeal and all of those kinds of things and thought I wanted to go into criminal law and then found that criminal law wasn’t quite my niche. And then came across to family law because essentially it’s helping people and it’s essentially helping people in one of the hardest times of their lives, and it helps them get, hopefully, some peace and to move forward more than anything else. And I enjoy helping people, essentially.

Kate Russell

And how long have you been in family law?

Lauren Patford-Smith

 So I have been practising family law for about 13 years now.

Kate Russell

And I suppose you’ve seen it all.

Lauren Patford-Smith

Yeah, I’d like to say no, but yes, I have. Oh, I think I have. So there’s not much these days that surprises me, that’s for sure.

Kate Russell

Well, you know, I think when it comes to separation and a property settlement especially, there are a lot of things that do surprise the people who are going through it. So perhaps we could talk a bit about property settlements and how different contributions affect the settlement. And we’ll start maybe with the marital asset pool. We always say to people, work out what’s in your asset pool. So first of all, just what is the definition of an asset, a liability, I think most people know, but a financial resource as well? How do you define those three things?

Lauren Patford-Smith

An asset includes all the earnings that were received during the relationship and everything that was purchased with those earnings, and that includes debts as well. So I’m moving into liabilities, but it’s it’s generally all assets held in either joint names or single names, and it includes superannuation.

Kate Russell

Right. And what about financial resources?

Lauren Patford-Smith

Financial resources is basically it’s not a tangible asset as such, but it looks at whether or not in the future you have a resource that you can tap into that’s going to give you a further asset that the other party won’t have part of once you’ve separated. That looks at such things as an inheritance that you might just must be about to receive, or you’ve got a work payment coming out that will come in in the next year, but you haven’t got that work payment as yet.

Kate Russell

Right. So maybe a big bonus or something coming to you.

Lauren Patford-Smith

Correct.

Kate Russell

Okay. And so you were saying before that it’s every asset that’s happened during the relationship?

Lauren Patford-Smith

Yes, generally. Yes.

Kate Russell

So. What about anything you brought into the relationship? How is that assessed?

Lauren Patford-Smith

Well, it’s based on the circumstances more than anything else. So people try to exclude homes and things like that from the asset pool. However, it comes down to a bit of a chicken versus the egg scenario. So once you’ve bought a home into the asset pool and, say, your new partner moves into that house with you and then starts to pay bills and starts to help with the mortgage and things like that, then it becomes unfair if you then exclude that asset out of the pool. So it sort of really depends on the circumstances and how long the relationship has been going, whether or not finances were kept separate, that kind of thing.

Kate Russell

Could that asset then be assessed, like, part of it was from before the relationship, part of it was after, and it might be looked at in that kind of broken down in that way?

Lauren Patford-Smith

 No, generally not. It’s either in or it’s out. And it’s been seen as like a percentage split. Issues. So if property that’s in the asset pool, you will be seen to be having made an initial contribution, which then gives you larger percentage splits out of the pool.

Kate Russell

What about debts that are aquired before, like, people bring HECS debts into relationships or like a personal loan or credit card? What about things like that?

Lauren Patford-Smith

Again, it depends on the circumstances. So HECS debts have been treated both ways by the courts. Some courts have said no, well, it’s the debt that was accrued during the relationship. And that person’s gone on to use that new job skills to earn money for their relationship. So they’ve included the HECS debt in. Whereas other courts have said, well, you accrued that HECS debt well before you even started your relationship. Therefore we’re not including it in the pool.

Kate Russell

Yeah. I suppose people potentially don’t even finish the course that they accrued the debt for. Right?

Lauren Patford-Smith

Correct. And certainly, a HECS debt, once you die, gets dismissed. It doesn’t come out of your estate. So it’s not logical to sort of include it in the pool, either.

Kate Russell

And give that to the other person to pay even if you’re no longer there.

Lauren Patford-Smith

Yes.

Kate Russell

So what about other assets, like gifts? You know, if, say, you know, engagement ring can be worth quite a lot of money. If someone has been given an engagement ring, is that belonging to that person or is that still seen as part of the marital pool?

Lauren Patford-Smith

Well, again, it’s all down to the circumstances. Generally. Myself, I say it’s a gift. You gifted that to the other person, so that person should keep that gift. But then, if you’re talking about a million-dollar engagement ring, there may be a little bit more of a dispute about how it should be divided and its worth. So generally, general engagement rings that are, you know, worth about the $5000 mark, I I say, look, you gifted that; you loved and respected that person when you gave it to them. That’s not in the pool. So that’s how I treat that. But again, million-dollar rings certainly do come up every so often and are added back to the pool.

Kate Russell

Now, Lauren, you keep saying it depends on the circumstances. And one big circumstance of relationships that end in separation and divorce is actually the amount of time that people were together. So I know it takes two years for kind of roughly two years without kids to be seen as a de facto relationship in the eyes of the law. Is there kind of any cut-off of time if people do get married quite early in their relationship that you might say your assets before aren’t included?

Lauren Patford-Smith

We look at marriages in terms of short marriages and long marriages. So a short marriage we do it basically term as a marriage that’s under five years, and a long marriage is seen as ten years and above as such. So in a short marriage, we are more concerned with your initial contributions, who had what coming into the relationship, who earned what, those kind of things. Whereas with a long-term relationship, it’s harder to take away those initial contributions because it sort of gets muddied over time, if that makes sense.  And you’ve bought in kids, and you’ve had inheritances or things through work, things like that, that just sort of continue to add up, so it just becomes much harder to try and separate them off.

Kate Russell

What about an inheritance, Lauren? Is that something that you have to share with your former partner if you have an inheritance during the period you’re together?

Lauren Patford-Smith

Generally, during the period you’re together, the inheritance will come into the pool and into your assets, and people will use it for living expenses or paying off their mortgages or something like that. School fees. So it’s generally seen as a contribution to the relationship, and during a separation, it’s seen as a contribution, so gains you more in a percentage split. However, if it’s accrued just after separation or something like that, it may be then excluded from the pool itself. But again, and I’ll say it again, it depends on the facts that are around the circumstances of that. And certainly, if an inheritance has come in in the last, say, two years just prior to separation, it’s going to hold more weight, contribution-wise, than an inheritance that was achieved ten years prior.

Kate Russell

It depends on the circumstances. It’s so important.

Lauren Patford-Smith

That’s right. And that’s why you can’t just Google and get an answer because everything turns on the facts, and everybody’s marriage and relationship is different. So I’d like to say that Dr Google is always right, but it’s not.

Kate Russell

Yeah. So it’s with these assets, liabilities and financial resources that are in your marital pool, the things you’re looking at it from a family lawyer perspective is when they were acquired, how long they’ve been in the relationship, how long your relationship has been together, where the asset came from? And each asset is looked at according to the circumstances of that relationship.

Lauren Patford-Smith

Yes, that’s correct. Absolutely. Contributions come into play using the four-step process that the courts use to determine a property settlement.

Kate Russell

So let’s start talking about contributions. So a lot of these ones we’ve just talked about that exist in the marital asset pool. We’re talking about it apart from perhaps financial resources. We’re talking about really tangible assets.

Lauren Patford-Smith

Yes

Kate Russell

They have a financial value, and they’ve been contributed to the relationship. So it’s going to be salary. That’s the main one, I assume. Plus all these other ones like things you’ve owned before, property inheritance. But financial contributions are not the only kind of contributions that people make to relationships.

Lauren Patford-Smith

 No, that’s correct. There’s indirect contributions, there’s homemaker contributions, there’s nonfinancial contributions.

Kate Russell

Perhaps you could break down and explain what each of those ones is. You talked about indirect financial contribution. What would that be?

Lauren Patford-Smith

Yes. So an indirect financial contribution is basically where you’ve got a windfall to an asset, not by your contribution as such, such as, say, a house increases in value over time. That’s not your direct contribution. It’s just simply luck, the market, you know, all of those kind of things. So it’s seen as an indirect kind of contribution in itself. So it’s not your direct input as such.

Kate Russell

Right. So you’ve increased your asset pool, but you haven’t personally done that increasing.

Lauren Patford-Smith

That’s exactly it. Yeah.

Kate Russell

 And what about then a non-financial contribution?

Lauren Patford-Smith

The non-financial contributions are where you make that asset worth more, but it’s not done from a monetary input. It’s more from, say, you’ve done renovations to a property, painted the property. And I must say, it’s not whether or not you’ve gone and paid somebody to do it, you’ve actually gone and done it yourself, like built a decking, extended the house, those kind of things, which adds more value to that asset.

Kate Russell

Okay. So you’ve put in the time, the effort, and maybe just paid a bit for the tools and things. But it’s your time and effort. Is that non financial contribution?

Lauren Patford-Smith

 That’s correct.

Kate Russell

Okay, so the contribution you’ve made that’s actually grown your asset pool.

Lauren Patford-Smith

That’s correct.

Kate Russell

And so these non-financial contributions and an indirect financial contribution are things that you’ve done as a couple, as your relationship has progressed, that’s helped to contribute towards your asset pool that then would split in a separation. Now, you mentioned homemaker contributions.

Lauren Patford-Smith

Yes. There’s what’s known as a financial contribution, which is generally the person that’s out there, the breadwinner, as we call it, that’s out there every day earning a living. And generally when you have kids that’s supported by a person that’s especially young kids that’s at home being the primary carer of their children, that’s what we refer to as a homemaker contribution. It’s basically that person that’s on the other side that makes it easier for that person to go to work, if that makes sense. So they’re both contributing to their separate sides of their relationship. But both is seen as being as just as important as the other.

Kate Russell

And this, I assume, is predominantly when there are children in the relationship that you’re looking at a homemaker contribution.

Lauren Patford-Smith

Predominantly, yes.

Kate Russell

And so that person who’s become the primary caregiver is really doing all the things that allowed the children to be in the relationship.

Lauren Patford-Smith

Yes, that’s right.

Kate Russell

 And for the other person to go to work, obviously.

Lauren Patford-Smith

That’s exactly it.

Kate Russell

 And you said they’re kind of considered equal contributions.

Lauren Patford-Smith

Correct. So when it comes down to looking at the contributions, the court will look at the homemaker versus the financial provider and say that they’re equal under the eyes of the law.

Kate Russell

Often when someone becomes a primary caregiver, they stop working altogether, or they have a period of part-time work when they’re juggling work, and being that primary caregiver in the house. And I suppose financially, that person has made a sacrifice, in that they’ve sacrificed the income that they would have earned and the superannuation on that income, but also pay increases over time. I assume if you’ve taken ten years out with some big career breaks and some part-time, you’re probably earning, I don’t know, $50,000, possibly more a year less than your partner who’s progressed.

Lauren Patford-Smith

Yeah, that’s right. Yeah.

Kate Russell

So are these kinds of sacrifices really taken into consideration when it comes to splitting that asset pool?

Lauren Patford-Smith

 Yeah, it is. And it looks basically at the third step of the four-step process when deciding the property split. It’s looking at your future needs step, and it basically takes into account the age and the health of the parties, the earning capacity of the parties, who has the care and control of children under the age of 18, that kind of thing. So it really sort of looks at if one person has, say, the financial provider gone so far and, you know, can now earn this capacity of, say, $200,000, the future needs step sort of says, all right, well, taking that into account, how do we try and make this a little bit more fair for that person that stayed at home? So they look at the percentage splits, and the court can change percentage splits based on those homemaker contributions versus financial earner contributions.

Kate Russell

Yeah. So that, I guess, by becoming a parent and then becoming a primary caregiver, you’re kind of taking away from your future capacity to earn.

Lauren Patford-Smith

Yes, that’s correct.

Kate Russell

And to rebuild your super. And you’re setting yourself back not just the time you’re out of work, but also the time to rebuild afterwards.

Lauren Patford-Smith

Yes, that’s correct. And generally with separation and splits. I always say to the parties, ‘well, you should be equalizing your super between you both to make sure that you both have the same amount, to make sure that it’s fair at the end of the day, because one person did stay at home and didn’t have that chance to make superannuation at the time.’

Kate Russell

And is it ever seen that your opportunity in the future, so post-separation, your opportunity to rebuild that super 1s compared to your partner, is it ever split that super might go more in favor of someone who’s a primary caregiver?

Lauren Patford-Smith

 Yeah, definitely. It’s up to the discretion of the court how it is split. I generally work on the premise of equalizing it. However, there are courts that add it to the pool and have the one pool. So say one party gets a 70-30 split. The superannuation is split in those terms as well.

Kate Russell

Right. And so both party’s super goes in and then it split it together. Okay. And I suppose, you know, you’re talking about how the court might split it, but if the couples resolve their negotiation without going to court, they can decide, ‘I would like to take more super and I’m going to let go of more of the cash asset pool.’

Lauren Patford-Smith

 Yeah, absolutely. Which is why not going to court is your best bet, because if you can do mediation and come to an agreement, you can do it in your own terms, which dictates whether or not you get more out of the super pool or you decide to keep the former matrimonial home instead. So certainly that’s why we encourage people to try their best to try and work it out before going off to the legal system, because the legal system will just cut it as they see fit, not necessarily how the parties want it to be split.

Kate Russell

 The former couple are much more control if they don’t end up in front of a judge.

Lauren Patford-Smith

 Absolutely, yeah.

Kate Russell

Okay. So if they can really understand how the law might see fairness and then apply it with the help of a family lawyer and mediator to their own situation, that’s giving them the best opportunity to be in control of that situation.

Lauren Patford-Smith

 That’s right. And it enables couples to divide proper chattels and things like that, whereas the court just doesn’t even want to hear about your fridge or your photographs or anything like that. They’re just like, I’ve got absolutely no time for that. I don’t want to hear about it. It’s worthless to me. ‘Too bad, so sad’ type thing. Whereas when you’re doing a mediation, you can sit there and say, well, that actually means something to me, or, that’s my hierloom, or all of those kind of things, which you just don’t get in a court system.

Kate Russell

 And do you work with your clients really on not just looking at the financial split, but really trying to work out what their goals and needs us to make sure that you can be split is going to help meet those goals and needs and not just see it as a real percentage split?

Lauren Patford-Smith

Yeah, absolutely. So if somebody comes and says to me, look, I’d really like to keep the house, and I say, all right, well, we can certainly do the sums and the math and see if we can get to that position. However, we’ve got to take things into account whether or not they can refinance their mortgage into their sole name and whether or not they’re going to be able to afford the repayments in the future. We certainly don’t want to be putting a split in place which, realistically, you can’t maintain and you’re going to lose it anyway. So certainly it’s more about having a look at the bigger picture and trying to work out where we can go with your separation more than anything else.

Kate Russell

How does the law really look at the future needs if it does end up in front of a judge? How do they assess it?

Lauren Patford-Smith

 Well, they assess it under the Family Law Act. We, we generally call them these the Section 75(2) factors. But basically, you know, there’s there’s some primary considerations that they look at which which they take into account, which, again, basically says, who has the care of children under the age of 18, the earning capacity of the parties, the age of the parties, when they’re going to retire, all of those kind of things. That’s what’s in the act and that’s what the court looks at.

Kate Russell

 What happens if a couple split and, you know, you’ve got really young kids and maybe they’re with the primary care giver a higher proportion of the time, and you reach settlement and you do your split, but then the care does become more 50-50. Is there any claim on that asset split after after it’s been settled?

Lauren Patford-Smith

 Not really, no. So we’ve got to we’ve got to be careful with that. And certainly it does happen. You get one partner that says, ‘well, it’s not fair, that she gets (or he gets,) more out of the asset pool because they’ve got the primary care. So we want a 50-50 split of time with the children.’ And we say, ‘all right, well, that’s not really practical because you work full time, the hours aren’t there, you leave before the kids go to school, you come home after the kids go to school.’ So we’ve got to take those into consideration and try and negotiate those things out before that happens.

But certainly, it certainly does happen where parties, with their best intentions, say, ‘we’ll share them equally.’ And then it ends up with one party having the majority of the care and there’s just not much we can do about it. You can apply to the court for spousal maintenance, there is child support, there’s all those kind of things. But certainly from a property aspect split point of view, there’s not much we can do after once it’s gone, the ship’s shape sailed.

Kate Russell

Right. So it’s only really those ongoing payments that happen till the child’s that any kind of way to adjust? Right. Does the age of each person when they separate affect their future needs and then how they might split? What if you’ve got quite a big age difference between the parties?

Lauren Patford-Smith

So if you’ve got somebody that’s nearing retirement age, the court will say, ‘well, they’ve only got so many years left that they can earn a wage, whereas you’re ten years younger, you’ve still got ten years more that you can earn a wage.’ So certainly the age does play into it, and people’s health. If somebody’s got a health issue that stops them from earning or working as often as the other, that’s also taken into account.

Kate Russell

Okay, and what about new relationships? Because I think a lot of people are a bit nervous about starting a new relationship or letting the other party know that they’re new relationship before settlement happens. How do new relationships affect settlement or affect how future needs are viewed?

Lauren Patford-Smith

Yeah, so if you come into a new relationship and they move in with you and they’re earning their own wage, all of those kind of things, the court sees that you’ve got an extra wage in your home, so you’ve got that added benefit. So the court does actually take that into account when determining a property split. Yes. So a lot of people don’t like to declare that they’ve got a new person living with them or declare that, you know, they’ve moved in with somebody because of that aspect.

Kate Russell

 And what happens if they don’t declare and it’s found that they do have that person?

Lauren Patford-Smith

 Well, probably not just on that aspect, but you can apply to the court to undo a property settlement. However, it’s very hard to do. It’s not easy to do. And you’d need to prove to the court that there was some real hardship to you. So the court should have another look at it. But certainly, if it’s bound to exist afterwards, there’s not much we can do about it.

Kate Russell

All right? And that’s really on the onus of the person or the other party to go to court. And I assume that’s the same if someone doesn’t declare some assets they have, so maybe they’ve got property offshore or something like that, and they don’t declare that, are there repercussions down the track?

Lauren Patford-Smith

 Yes, certainly. And certainly you can make an application to reopen the property settlement and say they didn’t declare all their assets, and certainly it has happened before, and the court will reopen it and split the assets again.

Kate Russell

 So even after it’s all said and done, if you’ve been hiding something away, you could still be liable for it,

Lauren Patford-Smith

Correct. Yeah. There’s a duty to the court to be frank about your assets and your liabilities once you start to separate. And if you don’t be upfront with everything, the court can find that you’ve deceived the other party and essentially the court. So they will reopen and have another look at the separation.

Kate Russell

 Okay. So once again, we’re really coming back to the best chance for a good, clean settlement that you’re in control of is full and frank disclosure and keep it out of the courts.

Lauren Patford-Smith

Correct. Absolutely.

Kate Russell

So, thinking about the practical impact of your settlement, does the court consider anything about your life after separation the practical impact of a settlement?

Lauren Patford-Smith

Yeah. And that’s again looked at the future needs step of it. The court will look at whether or not you’ve got a home to walk into or whether or not you’re going to have to pay rent and things like that in the future. So they’ve got the discretion to look at all of those things. Yes.

Kate Russell

 Okay, so making sure that parties are actually not left destitute and highest.

Lauren Patford-Smith

 And that’s back to the fourth step of the four step process, which is your just inequitable test, which basically at the end of the day is when the split that’s proposed, if looked at by the reasonable person, is it a fair split at the end of the day.

Kate Russell

 Okay. So you’ve been saying all along, it’s all circumstantial about how each one is split.  A lot of people on social media like to comment on 50-50. It’s it should be 50-50. It should be 50-50. Yeah. But it very rarely is 50-50, right?

Lauren Patford-Smith

No, 3s it gets quite annoying when people say it should be 50-50 and you just think, but there’s so much more that you haven’t considered. You haven’t considered the gray areas. Yeah, 50-50 would be great, but at the end of the day, it just doesn’t work that way. And certainly long marriages of 40-plus years, that kind of thing, where they’re the same age and same aspect of their life, certainly then perhaps 50-50 is appropriate.

Kate Russell

They have the same needs.

Lauren Patford-Smith

Yeah, that’s it exactly. They don’t have kids. They’ve moved past all of that. Then yeah. Maybe a 50-50 split of the asset pool is correct. But certainly when you’ve got young kids and one party isn’t working as much or there’s health concerns or something like that, then a 50-50 split just isn’t correct.

Kate Russell

 And so there’s no one walking into see a family lawyer. Is going to be able to say, I’ve Googled and I think I, I deserve 70 per cent. Because it’s not about deserving, is it?

Lauren Patford-Smith

No. Nobody deserves deserves anything. It’s it’s basically just looking at the asset pool as as it is and looking at all those aspects under the law, and that’s how we advise on what we think is a percentage split. And people come in and say to me, I want an 80-20 split in my favor. And I just think and I say to them, it’s very rare that people get an 80-20 split. It just doesn’t really happen that way. And you’ve got to have made significant contributions or have significant future needs to to really get up on an 80-20 split. Even a 70-30 split, you know, is is quite high in in somebody’s favor.

Kate Russell

If both parties are expecting that kind of split. There’s no 140%.

Lauren Patford-Smith

 No, that’s right. Exactly it.

Kate Russell

And that’s going to go to a fight. So coming into your negotiation with an understanding of all these aspects that are going to be looked at is just so important, isn’t it?

Lauren Patford-Smith

Yeah. And that’s exactly right. And certainly, if you got a 70-30 split, that’s probably going to be a very good day in court. So certainly, you’ve got to go in with a mindset that, hey, neither of us are going to be happy at the end of the day when we walk away from this. But it’s whether or not we want to make the decisions ourselves, are we going to put it to somebody else to make that decision for us?

Kate Russell

And how much of your asset pool is going to get eaten up by going to court to fight over those extra percent.

Lauren Patford-Smith

And how much you want to give to the lawyers and how much you want to pay the court to do those kind of decisions for you. And certainly lots of money is spent once you start litigation in the family court system.

Kate Russell

 And not just money, emotional cost, time, life disruption, future parenting relationships.

Lauren Patford-Smith

Yeah. That’s right. It’s extremely stressful. So if you can work it out between you both how your parenting and your property aspects are going to move forward in the future, you know, you’re 100% further than somebody that decides to go off to court. Now, generally, there is, you know, those legitimate cases that need to go to court. Parenting issues, property issues, family violence, all of those kind of things. Yeah. There are legitimate cases, but generally we encourage you to reach out and take care of your own destiny as such.

Kate Russell

Yeah. Now we’re talking about deserving stuff and people saying, I want 80-20 split in my favour, which really seems like I want to win.

Lauren Patford-Smith

 I want to win at all costs. Yeah.

Kate Russell

 And it’s not really winning, isn’t it? It’s reaching agreement.

Lauren Patford-Smith

That’s right. There’s no winning in the family court system. None whatsoever.

Kate Russell

And so in the family court system, because no one’s really on trial, so the, the court doesn’t ever look at behavior in the marriage apart from perhaps family violence, which is what we’re not really talking about that so much today. But relationships end for a whole lot of reasons. Does the court ever consider a person’s behaviour in the relationship when they are deciding on how assets should be split?

Lauren Patford-Smith

They’ll have a look at, you know, behavior such as a massive gambling addiction, where in the, you know, in the past two years prior to separation, you’ve gone out and spent $500,000 in gambling. The court may then say, well, that’s a negative contribution to the asset pool, and may take that out of that person’s share. Certainly that kind of behavior is taken into account. But if you’re talking about kind of behavior where one person’s cheated on the other or lied to the other person, or the term gaslight, or all of those kind of things, the court just really doesn’t take any of that into consideration. We have a no fault divorce system here in Australia.

Kate Russell

So it’s really like, right, whatever has happened has led to the end of this relationship. Now let’s go from the end to what’s going to happen in the future, 1s not dwelling on all the past wrongs of the relationship.

Lauren Patford-Smith

 Yes, correct.

Kate Russell

 And then after that settled, you said there’s not much chance of ever reopening a property settlement unless some big thing comes to life.

Lauren Patford-Smith

 Yeah, well, that’s right. So certainly, if an inheritance comes in, like the day after a property settlement is signed off on, then you might say, okay, we might need to reopen this and have a look. And certainly there’s other applications that can be made to the court, such as child maintenance, of spousal maintenance. There’s child support you can make binding child support agreements as to school fees, all of those kind of things. So there are aspects that can be done outside the property settlement. But generally, once a property settlement is done through the courts via either litigation or via consent orders, they’re fairly done and dusted.

Kate Russell

And just a final thing. Property settlement and divorce, actual legal divorce are actually two different things, right?

Lauren Patford-Smith

 Yeah, yeah, two different things. So there’s there’s three things we sort of look at as family lawyers. We look at divorce, property and parenting. So and they can all be done at separate times, and they can all be done at the one time, so there’s not really a time frame on it. So a property settlement can be done anytime after separation. A divorce can only be applied for after twelve months of being separated. And generally, once you’ve been divorced for twelve months, there becomes a time limit then about making a property settlement claim. Right. However, if you’ve got joint assets together and things like that, the court will probably take that into account and let you do it anyway. However, the courts don’t like it. You need to ask permission.

Kate Russell

 So you can actually settle all your property, legally, separate everything, and you’re still married to that person?

Lauren Patford-Smith

 Correct. Absolutely.

Kate Russell

Does that increase your chances that something might come up again and it gets reopened. Or is that just really seen as a formality?

Lauren Patford-Smith

Look, there’s a risk. So we certainly advise our clients, once you’ve done your property settlement, get a divorce, sever it all off so you can move off of your life. Certainly. And just because you’ve gone down a property settlement doesn’t mean that the parties are actually separated. So there are marriages where they’ve done a property settlement for various reasons, but remain married. And then the property settlement will have to be redone years down the path because things have changed again. So that’s a whole different aspect of law and case law.

Kate Russell

That’s a fun one.

Lauren Patford-Smith

Yes, definitely. But certainly that has happened before. We always encourage that once you’re done finalise the whole lot.

Kate Russell

Yeah, fair enough. And, you know, I mean, obviously when children are in the relationship, you can’t just end it. And there is that ongoing relationship. All the more reasons to keep it out of the court so you don’t end up hating each other.

Lauren Patford-Smith

 Yeah, that’s right. That’s for sure. It’s just that relationship and your children develop off how you treat each other after your relationship. And they view relationships in the future the same way as you do as parents. You model that behavior. So if your relationship has unfortunately ended, how you move forward from that can be so advantageous to a child if you’re amicable. And it shows them that just because something broke doesn’t mean that your life doesn’t move on. And certainly relationships, you can have another relationship, those kind of things And picking on the other party and saying derogatory terms and things like that really have a real effect on a child. So you got to be really careful about those things.

Kate Russell

Absolutely. I know from personal experience, being a child of divorce, it’s not healthy.

Lauren Patford-Smith

 No, that’s right. And I’m an independent children’s lawyer, so I see the harder cases at court in relation to parenting. And certainly these children just suffer so much because of these ongoing litigation circumstances. And they can go on for years, which just affects them so much.

Kate Russell

That was Lauren Patford-Smith. I don’t know about you, but the main takeaway for me from speaking with Lauren is that “it depends on the situation.” There are so many factors that are weighed up along each step of the 4-step process to family law settlements in Australia. Having a trusted and experienced legal professional to give you at least some advice and insight into your rights and your obligations seems like a good investment. No matter how straightforward my property split might seem to me, or what my friend did when they separated, or what I’d read online, I know I’d need that peace of mind to trust that I was doing the right thing for my family and my future and that I was doing the right thing by my former partner.

 If you’d like to learn more about your options in separation, or you want to be put in touch with professionals to help guide you through, please go to theseparationguide.com.au and complete our 3-minute interactive Q&A, or check out our other podcasts and blogs. If you’ve found the information today useful, please subscribe, share and leave us a review. It’s a great way to help our podcast reach others going through separation.

In the spirit of reconciliation, The Separation Guide acknowledges the traditional custodians of country throughout Australia and their connections to land, sea and community. We pay our respect to their elders past and present and extend that respect to all Aboriginal and Torres Strait Islander peoples today.

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