How are assets divided in a divorce?
They have been separated for 10 years but now she wants to get divorced. He wants half of everything, including money made after they split up.
Welcome to Sisters In Law, news.com.au’s weekly column solving all of your legal problems. This week, our resident lawyers and real-life sisters Alison and Jillian Barrett from Maurice Blackburn advise a woman about splitting up assets after being separate for 10 years.
My husband and I separated 10 years ago but didn’t divorce as we both didn’t see the need. However, I have fallen in love with someone else and would like to remarry.
My ex-husband has suddenly turned vicious and is making the divorce very difficult.
In the 10 years since we separated I have become quite successful and run my own business and he says he’s due half.
I’m genuinely shocked by his behaviour and I’m worried he might try and take half of what I’ve worked hard to build up. What are my rights? – Anna, QLD
We’re sorry to hear you’re having a difficult time arranging the divorce and property settlement.
Property settlements, once a couple has separated, involve dividing assets and any liabilities. It’s a final resolution so that each person can retain any assets they received in the settlement and move forward with their lives.
Even though your business was started following your separation it will still be considered an asset to be considered as part of the settlement and you must list it as such.
The way the business is structured and how it is operated may impact how the business is dealt with during the property settlement.
It’s unclear what sort of business you have but if it is a sole trader business without any employees you will generally keep the business as you have the skills to continue to run it.
A value still needs to be attributed to the business and usually, where you are a sole trader without employees, only a modest value would be applied.
If your business has multiple employees then it will still need to be valued, although it will not necessarily be assessed at simply market value as if it were being sold.
A property settlement valuation also determines the value of the property to you, and the benefits that you would receive if you continued in the business. It must also reflect the fair market value of the business.
A business valuer will consider things such as whether the business earnings are stable, the assets and liabilities and how the business is categorised (ie sole trader, trust arrangement, company-held business etc).
It can be better to resolve a property settlement sooner rather than later following separation as the law takes into account assets at the time of the property settlement, rather than at the time of the separation or divorce.
You haven’t mentioned whether you have a binding financial agreement (known as a ‘pre-nup’) that was entered into prior to your relationship commencing.
Sometimes these agreements are not drafted properly and, as such, aren’t binding.
Prenups are also relatively rare, so we’ll work on the basis you don’t have one.
After your business and all other assets, liabilities and financial resources have been valued, then the contributions of each spouse to the property pool will be assessed, identified and evaluated.
Current and future circumstances such as age, state of health, current earning capacity whether you’re each earning an income or have the potential to, the length of your relationship, if either of you are living with someone else (plus that person’s financial circumstances) are considered for you and your ex-husband, as is the age of any children.
Finally, the law has to consider what is fair and equitable taking into account the financial circumstances and all other factors.
There are independent family dispute resolution practitioners available that can assist former spouses in coming to an agreement.
It goes without saying that if you can reach an agreement with your former husband on how your property should be divided without any court involvement it will be a much cheaper and often quicker process.
If you do agree on the division of property you should formalise your agreement by applying for consent orders in the Family Court.
If you cannot reach agreement, then you can also apply to the Court for orders about the division of property and any payment of spousal maintenance.
But you can’t make this application until you have tried to resolve the dispute out of court.
However, based on what you’ve told us, it sounds unlikely that you’ll be able to reach an amicable agreement. This means you’ll need to apply to the Family Court for orders about the division of property. This application must be made within 12 months of your divorce becoming final.
You should obtain specific legal advice, and provide your lawyer with all relevant information and documents.
This legal information is general in nature and should not be regarded as specific legal advice or relied upon. Persons requiring particular legal advice should consult a solicitor.
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