When a relationship ends the complexities of untangling financial ties persist until a formal property settlement is achieved. During this time, bank accounts may go up and down, superannuation funds can grow, property values might change, mortgages come into play, and new assets may be involved. Sometimes, one person might receive a big inheritance or a surprise lotto win.
Understanding "Property" in Legal Terms: In family law, the word "property" covers everything you may have an interest in. This was established in a famous 1835 court case called Jones v Skinner where it was said property is “the most comprehensive of terms (to describe) every possible interest a party can have”. Ultimately, the Family Court has the authority to adjust the parties' interests in all of their property, regardless of when or how it was acquired or in whose name it is registered. This means that either party can potentially have a claim on any property owned by the other party until final court orders are issued or a mutual agreement is reached. If you are unsure if something is classified as property, West Coast Legal can assist you.
Clarifying Misunderstandings
A common question that comes up at West Coast Legal is how the court handles property acquired after the breakup. Some people think that anything bought, or debts acquired, after the split won't count in the property division.
There is a widespread misconception that assets obtained after separation will be excluded from the pool of assets to be divided between the parties. Assets acquired after separation do matter in the property division process. The court has the authority to consider all financial matters, no matter when, how, or whose name it was acquired under. So, yes, if you were to purchase a new car, for example, after separation, this must be included in the property pool.
There’s also confusion about valuing assets - some believe that if, say, their superannuation fund or property increases in value after the separation, the value of the asset is to be taken at the date of separation. However, this is untrue. The assets and liabilities are dated at the date of settlement, or if you are in Court, the date of the hearing.
If you are thinking about making a large purchase, such as a new home, it is best to seek legal advice from an experienced family lawyer before doing so. This is something West Coast Legal can assist you with.
Concluding Remarks
Sorting out finances after a breakup isn't easy and understanding the legal principles of property division is crucial. Assets acquired after separation do count, so be cautious about money decisions until the formal property settlement is complete. Knowledge is key when navigating the complexities of family law, so reach out to our team of experienced Family Lawyers at West Coast Legal to gain a helping hand on 08 9325 3334 or by email at reception@westcoastlegal.com.au.
