What’s mine is mine after separation – isn’t it?
Virginia Bui from the family law team at Norman Waterhouse looks at the division of property after a relationship breakdown.
Think “what’s mine is mine”, even after you breakup?
The short answer is not always. Assets you acquire after you separate will generally be considered in any asset division between you and your former partner.
When it comes to assets, there is no line in the sand drawn at separation. That means any assets you acquire after you separate are potentially up for grabs by your former partner.
The only way to protect yourself from a claim is to formalise your property settlement before acquiring further assets. There are two ways to do this by agreement. The first is through a court order and the second is a financial agreement. Neither require you to set foot anywhere near a courtroom door.
The process of dividing up assets after separation can take time, sometimes years, especially if you and your former partner cannot agree and are involved in court proceedings.
A lot can change on the financial front in that time, for example:
- You may buy a new house (maybe with a new partner)
- You may receive an inheritance
- Your superannuation may increase significantly through extra contributions or investment earnings
- Your business may boom or go bust.
To dispel some commonly held misconceptions:
- None of these assets are guaranteed to be beyond the reach of your former partner, even if they come to you after separation
- It does not matter that an asset is only in your name; it will likely be considered in any asset division
- In the case of a house or superannuation, it may not matter that it was funded from income earned post separation
- Your former partner has a case in asking that the current day value of assets be used rather than value at the date of separation.
On the flipside, it does not mean your former partner gets to keep your assets acquired after separation. It also does not mean that your former partner is automatically entitled to a 50 per cent share.
You ask, how is this fair? Do I get any credit at all for wealth I built after separation?
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The answer depends on the specific facts of your case and requires a close examination of events after separation – Who paid the bills? Who cared for the children? Who funded the acquisition of additional assets?
Superannuation sits in a special category of its own and there is case law that suggests parties making greater contributions to their own superannuation post separation might receive more credit for their efforts.
The takeaway message is that assets acquired after separation are not generally excluded from a property settlement and while every case is unique, it is strongly recommended that you speak to an experienced family lawyer to fully understand your legal entitlements.
For further information or advice regarding post separation contributions, please visit www.normans.com.au to contact one of our family lawyers. Or contact Senior Associate Virginia Bui at [email protected].
