When there has been a breakdown in a relationship resulting in separation, it is highly likely the parties will be looking to reach a property settlement. To reach a settlement, it is a requirement that the value of the matrimonial ”asset pool”, that is, all the property, being real estate, bank accounts, motor vehicles, superannuation and any other assets, is established.
For various reasons, the wish to complete a property settlement may come about some time after separation. Therefore, the question is, at what point in time does the law say is the correct date for assessing the matrimonial asset pool? What exactly are the assets of the marriage that will be the subject of a property settlement?
Is it only those assets that exist at the date of separation that should be included, leaving the parties free to build up their individual personal wealth after separation? Or, does the "matrimonial pool" continue to grow after separation, right up until the property settlement is finalised? This date may be some years in the future and often the parties have substantially increased their own wealth during that time.
Generally speaking, separation does not "freeze" the matrimonial pool and assets acquired by either party after separation may be included, even though considerable time has passed.
In a case decided by the Full Court of the Family Court although the asset pool at the time of separation was substantial, the husband earned income and redundancy packages during those four years that exceeded this amount. The parties had been together for thirteen years and had four children. During the marriage the parties had different roles agreed between them – the husband worked as a professional, the wife as homemaker and parent. At the initial hearing, the judge found that the parties’ contributions to the assets as at the date of separation were equal. The husband argued that it was not fair for the wife to claim that her post separation contribution as a parent was equal to his for the following reasons:
- The growing independence of the children;
- The husband's absence from the home;
- The substantial period since the parties separated.
The Full Court disagreed, stating that during the marriage the wife in her role as homemaker and parent contributed to the husband’s ability to earn significant post separation income. The court added that the fact that the wife’s contributions cannot be given a dollar calculation does not render them less important.
If you have new financial ventures you wish to embark upon on your own following separation, it may be wise to firstly finalise your property settlement as soon as is prudently possible. For further information, you can also watch our video at this link https://www.tonkinlaw.com/resources titled “Delays in Property Settlement".
Each family situation is unique and seeking expert family law advice about where you stand may help to ease some of the stress and uncertainty associated with separation.