Property Settlements and the Property Pool

Happens, the Divorce Down Under podcast where we talk about everything and everything family law related.

Welcome very much to another episode of Split Happens, a divorce down under podcast with me, Alex, and my colleague Liza. Today we're going to be talking about Property settlements in family law. Now This is a topic that we get asked a lot about in the wake of a separation. So this is really about what happens to the money and the finances of a couple when they're getting divorced or their relationships come to an end.

So without any more ado, I'm going to pass it over to Liza to try and give us a quick rundown on that and I'll jump in with any questions as I as we go. So Liza, tell me about property settlement in family law. So the very first thing that you really need to be aware of is the divorce. I need you to help me do this. I need you to help me get through it. And a lot of the time what is needing Over the years we've been together. And it might be in your name.

So all of that property But what we're talking of that property. So take for example you've got the you've got your house and it might be in your husband And your um uh the very first thing is whether So it doesn't necessarily follow that just because one of you has got property or or that there should be an automatic adjustment. If you separate from somebody doesn't automatically flow that there should be a settlement upon you? There's no automatic

So the number could be zero. It could be zero. You could. اشتركوا في القناة So the stage one is really quite a big stage, but highly technical in that should there ever be a property settlement at all? And I suppose that's worked out by looking at how people have arranged their finances and other things like how long they've been together. Would that be right? The length of the relationship is a big factor. So the longer a relationship Smaller settlements or even no settlements.

Right. Oh, like um being dreary in law schooly like a restitutional approach. So you you restore people to the Right. But there'd need to be some dealing with some finalisation of that financial relationship where you for example, it might be a very short relationship and it might be possible to put people back to where they were, but you've still got to sever the ties if you've got a joint mortgage or something like that. Every situation. We already Yeah.

Okay. Well we'll we'll come back uh we'll come on later on about yeah we'll get to how you can formalize things, what documents we're talking about. But going through the the process then, so the first thing that you would do if you go and see a family lawyer, the first thing that they should be considering is almost a had a little bit of a

Is there a need for a property settlement? Is there a need for an adjustment? And let's assuming that you know we think that there is, or the court says, Yeah, we think.

What's the next step then? What what's the stage that happened? Also all of your liabilities such as your mortgage So these are p these are personal debts and they go in as well, do they? Personal debts, that's right. So everything goes in. Rydyn ni wedi'u defnyddio'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r yw'r. Yeah, we're not going down to Where everything sits. You're not listing on the Gold Coast, that's down at Burley. So in terms of um what we're what we Right.

So it's a it really is like putting together a balance sheet for a set of accounts. So we've got all of these things that we own, we've got all of these things that we owe, and this is our net position. And y you mentioned as well, I think, superannuation.

That can sometimes be a bit of a surprise to some people that they're super, which they sometimes perceive to be really personal and just belonging to them. But it's not. It's it gets thrown into the pool. It's in that pool, isn't it? You know, down in Pizzy Park with everybody else down.

So we've got a property pool then. So we've we've worked out that there's going to be an adjustment order and we've worked out there's a property pool. Well wha what do we do with something in that pool like um a piece of real estate, a piece of artwork or something? You say it's worth a million, I say it's worth nothing. Or or a dollar. Well

So would I get that on my own? I'd just go off and get my own value and and Well many do we We'll get back to the dog'cause that is usually a highly emotive issue.

It is a It depends on what kind of dog it is, but um we'll get back to the I won't talk about dogs just yet, but going back to property generally, working out values for things can be really property settlement exercise in that they can't seem to move they f they struggle to move past agreeing on a value because of course there's a strategy involved which when it all Yeah.

So therefore you've got to disempower people, haven't you? You've got to have a a neutral, third party, professional valuer. I'm not talking about, you know, for valuing the contents of the cupboards and the and the cutlery drawer, but rather the big ticket items. That's right. Pieces of real estate, expensive works of art, and one area that we get bogged down in a lot in our family law practice. is business valuation.

Business owners and operators, their businesses might be worth very little on a balance. On a day to day basis or in a from a taxable perspective. Because that's the income after tax. Really, the value is in the income that that can actually generate and the things that it can pay for. And its true value might be very different to that person. So how do we value a business? Sounds expensive. Every time you hear forensic value, even me knowing what lawyers' rates are, I go crikey.

Right. So um I'm gonna play devil's advocate there then though, because sometimes in the wake of a separation one party and one person, sorry, one party ends up with most of the money or the control of the money and they might be, for example, the business owner and say, Well I'm I'm not

for this if you want this valued you pay for it. So that might sometimes then mean if you can't even agree the property pool like that, you're gonna have to get some kind of a court order Um when you're in that situation, if you're if you're not Although a lot of the time Yeah. They

Our friends at the Federal Circuit and Family Court of Australia. Available in a central capital near But just Critically is having a court make the order to appoint, you know, Joe Bloggs or Jane Smith as being the expert value. And also the Where um say for ex I think you said before afford it and they're saying well if you want it you pay for it. Well the court Right. It can be taken account of later on, whoever pays for it, yeah.

All right, so there's your property pool. That's that's the second stage that we've talked about. We we know that there's going to be a property adjustment of some sort. We've now been able to work out what bits of pieces of property, whether it's whatever it might be, money and banks. So the stuff that we own. I was gonna ask you about that, because the start of a relationship and the start of a marriage in in you know in our modern world are often very different

World as well, often mean very different things. So it is cohabitation then that's the case. That's gonna be scaring a few people, I should think, when they listen to that that Traditionally. Yeah. But sometimes relationships at family law might not even need that. But maybe we need to create some kind of little pseudo contract that you take out every time you go out on a date with your boyfriend or girlfriend. Yeah, just tick a box, tinder profile. Swipe you know, before you swipe The box.

Acknowledge that this is not a de facto relationship. That's right. All right. So anyway, we we're digressing to to cohabitation. That's a really interesting point, but so we're looking at initial contributions from the start of Relationship. Yeah, I usually And so um you talk about the So what sort of things would be an initial. her name, she brings that and it's unencumbered. Right. But

We're talking pre crash of course, aren't we? Yeah. Before the property market crashes in twenty twenty three and this is an historic. In terms of That is some scenario that we have all seen. A person starts a relationship and one of them has you know, they've they've been the prudent person and they have saved and they've they've scrimped and they've saved and they've they've been careful with their money.

You either a place of their own or they're buying a place of their own and they've got their car and a bit of soup have staved up and furniture and nice things. And then they are smitten by somebody who is a spendthrift, ne'er do well, fabulously exciting, windswept and interesting but with ne'er bean to them. And so you have those contrast Is that gonna decide everything then, the initial contributions or do we need to go beyond that?

really important in a shorter relationship because the party who brought that initial contribution of five hundred thousand dollars You've got um these people who over the years and they've both joined um along the way, it's still not gonna have as much of an impact

Yeah, I I wrote down the expression when you when you used her a little while ago. Eroded the weight of initial contribution. So that n that makes perfect sense that if you are together for a very long period with somebody Whilst they may have started out with quite a bit more than you The longer that you're together the greater the financial intermingling, the greater the Shared financial features.

sort of really starts to have that drip drip drip effect on that But what became apparent to him was that she would and performing service. They're all things I suppose that if you have to pay somebody to do all of those things, then that would be a big outlay. So she's saving that relationship, that expenditure. So that's her indirect financial contribution. Headbanging on a mediation table. A number of probably inappropriate commentary from myself but I find that hard to believe.

Mae'n ymwneudol, mae'n ymwneudol, mae'n ymwneudol, mae'n ymwneudol, mae'n ymwneudol, mae'n ymwneudol, mae'n ymwneudol, mae'n ymwneudol, mae'n ymwneudol. call homemaking contributions. So in those sorts of situations you've got the um and and

Football training. And it could be well quite right too. Thank you for that. I appreciate that. Um but the the parenting aspects as well, i that's something which a lot of couples sort of reach an almost unspoken agreement about. I mean sometimes they'll talk in the first flush of their romance that say, Oh it'll be wonderful, we'll have a little Johnny, little Janie, we'll do all of this, this is what we'll do, roses in the garden and all of that white picket fence.

And you'll stay at home whilst I go out and earn. And it could be either way round they stay. You're right, historically and and still generally we find that it has been and we might be a generation out It has been the father that's gone out and earned the higher income whilst the mum has stayed at home. And it's been because of their own agreement. So There has to be value placed upon the work that's done in parenting. And my goodness me, I mean, I remember when my boys were very small.

Great, I'm off to court today. Phew you know, I I won't be changing a nappy for about twelve hours, so Yeah. It's really, really hard work looking after small people. It is a But it's funny you should say that because By by bar Liza does actually mean every pub in Queensland. As as well as her previous career as a barrister, I should say, and they refer to themselves as But I'm still at the bar. So anyway. Well women even allowed in there in the back of the day, huh?

I'm gonna get thrown off this podcast in a minute. That's fine. I'm sorry, we're going back to So parenting then, that is y looking after the kids and being responsible for all those difficult things, managing a home, those are all really, really valuable contributions. But they don't have a dollar figure, do they? It's it's unfortunate but a lot of So what we need to make sure is that those um contributions are recognised and and it's all So even if you're not going to be able to do

And the dog. And the dog? Who's going to tie the little ribbons in Tricky Woo's hair if you're out at work? No, that was Mrs Pumphrey from the James Harriot stories. My my dog is not called Tricky Woo. Um but in terms of in terms of the home making contributions. all the other things that we need to do, um, that are that are done, that that the husband or the wife or whoever the worker is that doesn't have to do, you know, they don't have to Go do the grocery shopping or pay the

I mean it's a lot of work that goes into that. So right, we've got our contributions then. That could be monetary, indirect monetary, or completely non monetary, but they're all contributions and in their own

So what's the next step? That's the first three things. The first Should there be a property settlement at all? If the answer to that is yes, what property are we talking about? Then the third thing is, okay, who's done what? Who's earned? What does that mean? For the non lawyers out there, that's that's talking She's now in a new world where she's not gonna have that income stream.

That's that sort of that commonality of purpose whilst you're together that we were talking about a little while ago, about shared financial future, but suddenly that's pulled away. a lot of discussion about calling it a further adjustment to to what um what the boat. But I still like to think of it as a further adjustment because So they may not kind of you know equal each other out if you're both relatively

Similar kind of incomes, there's no health issues, there's no dependence. So it might not really be a very relevant consideration, but it could be enormously relevant to as. an older couple that maybe an older couple that have still got financial dependence of the relationship and the thing is too is that a lot of the time when you when you're we're dealing Those health issues can cancel each other out, but who's gonna Pretty much. Hang in as long as you can, you'll get a bigger share.

So so realistic. where a lot of the time we sort of we try and um address things like what's called spousal maintenance so that's where there's All right, we'll we'll probably cover off spousal maintenance. It's a whole other topic. But for for our purposes today then. So we've got to figure out our fourth thing then is the future needs of the people and where they are at in life there. That awful word that's used antecedents, what's going on?

That takes us to the last and probably the trickiest fairly short topic to discuss. Just and equity. So how how does that all work? What does that mean? Although it's a... And they're right. But for most people out there is is this really That's a judge's decision, isn't it? So Um it it's it results it those the effect of those orders Um Farm cases they're a whole other world. We'll do that as a That's an episode all on its own about farm cases and family properties.

So it might be that the judge is saying, Well, is it really fair that And is there a way of competing? That's right. So that's where they Because they're trying to come up with a with a solution that is going to work. Um, there are plenty of judges out there who will just go, you know what? care that this house has to be sold, it's going to be sold to divide it up. But when there are other considerations and a lot

And and certainly you I mean most cases I mean we talk about the courts all of the time because that's the acid test. What does the legislation say? What are the rules of the courts say? What are the reported decisions? But most cases don't actually end up that being resolved by a final So it's about your experience and your And putting together those sort of legal heads from having spent plenty of time in courts and crawled over these cases and decisions and say

Those outcomes are inside the range that would be considered to be fair or they're outside. And it's getting them to be within that range of saying You might not like it. Probably the outcome that's going to be or it's close to the outcome. And do you want to roll the dice and lose another eighteen months and goodness knows how many tens of thousands of dollars on some lovely barristers that we all know and can brief? Or do you want

And that's very often the the difficult but important job that we do. When you're thinking about What is it? Don't think about it. compromise, if you can show some common sense, that's where we really Well that look that's really helpful. Thanks. I I I like that expression, the ticket to freedom. I might try and start selling those on the on the corner.

Um if you've listened to this podcast you've got any questions about property settlement then feel free to put some comments down below or to send us an email and we'll try and future episode. So thanks very much, Liza. That's property settlement in Family Law. Hope you enjoyed it and don't forget to tune in next time for the thrilling episode of Split Happens or Stand Under.