One of the most complicated matters of divorce or separation is the division of property/assets. But what happens to any property/assets acquired after separation? This question forms the basis for many disagreements. The answer to whether property acquired after separation forms part of the property pool is....it depends!
Your property pool is determined at the date of your settlement either by making an Application for Consent Orders, A Binding Financial Agreement or by Order of the Court. This means that property acquired after separation and before any property settlement may still form part of the property pool and may be open to division. There is no basis for excluding property acquired after separation from consideration in a property settlement.
A lot of assets can fall into the property pool for division because, as a starting point, the Court assumes that partners work equally to add to their wealth. Assets that can fall part of the pool include:
- Real Estate
- Cash and Bank accounts
- Motor vehicles
- Retirement Funds and Pensions
- Stocks and shares
- Art furnishings and collectables
- Businesses
What happens if I win the Lotto?
In general, lottery wins will remain the property of the person who purchased the ticket. However, there are exceptions.
In the case of Farmer and Bramley [2000] FamCA 1615 the Husband won $5 million after separation. There had been no formal property settlement, and the parties did not have a property pool to divide at the date of separation. The Court considered the contributions made by the wife of financial and emotional support. The wife received a $750,000 split from the lottery win.
What happens if I receive an inheritance?
Receiving inheritances shortly before or after separation and whether those funds should be added to the property pool is a common disagreement between parties in family law matters.
In the case of Bonnici and Bonnici [2003], NSWSC 1148 the Husband received two inheritances shortly before separation. The Court said that, “property does not fall into a protected category merely because it is an inheritance”. The Court decided that the inheritances formed part of the property pool and were open for division.
What about my post-separation income?
The Court will likely look at the other party's contributions, such as staying home and caring for any children. Income can still be considered, especially when spousal maintenance and child support are issues to be resolved.
It is important to remember that any assets and income acquired after separation pending the resolution of a property settlement continue to be considered. It is essential to resolve your property/asset division in a timely manner after separation to minimise complicating the settlement and potentially having to give up an asset acquired after separation.
Many people believe that property/assets are split equally after separation. However, the issue of property/asset division is much more complicated. Rather than going for an equal division, Courts aim to do what is fair ( just and equitable) to both parties, which is determined by many factors, including the contributions and future needs of the parties.
If you require advice about property division and want your separation or divorce to remain amicable, contact our office today for a free, no-obligation 15-minute clarity call to speak to an expert Collaborative Family Lawyer.