THE IMPORTANCE OF INITIAL CONTRIBUTIONS IN FAMILY LAW PROPERTY SETTLEMENT

Home News THE IMPORTANCE OF INITIAL CONTRIBUTIONS IN FAMILY LAW PROPERTY SETTLEMENT

There is a common misunderstanding that everything one brings into a marriage or de facto relationship remains their property absolutely in the event of any future separation. Under Australian Law, that is not the case.

Instead, upon separation, the Law says that one must identify and assess all contributions a party has made during the relationship. Importantly, this can include initial contributions that a party makes at the beginning of a relationship.

Therefore, in most matters, it is important to identify what each party had, by way of assets, at the commencement of the relationship. In the majority of cases, such an exercise is an easy one and assets are easy to identify.

It is very important to not only identify the asset that has been contributed but also to identify the nature of the asset contributed and the effect (if any) that asset had on further contributions made during the relationship.

For example, if someone contributes a home worth $500,000.00 at the beginning of the relationship and that home is used by both parties to reside in during a 20 year relationship and is worth $2,000,000.00 at the end of the relationship, then more significance and weight would be placed on that initial contribution, because of the benefits it provided to the parties throughout the relationship. It was an asset that appreciated in value and provided other benefits (via contributions) to the family.

Contrast this with someone who contributes a $100,000.00 motor vehicle at the commencement of a relationship and that vehicle sits in the shed for 20 years and is never used. At the conclusion of the relationship, the vehicle is worth $5,000.00. The contribution is practically worthless and little weight or importance would be placed on it.

It is the nature of the asset that is contributed and the use to which it is put that is very important.

Further, one does not always have to contribute tangible assets. If one has started a business for instance and has an existing client base or has already obtained qualifications and degrees, then the contribution of that expertise and/or existing client base, may in itself be an important contribution during a relationship.

Therefore, in all relationship breakdowns, it is important to identify the nature and type of assets and/or resources that a party had at the commencement of the relationship and to examine to what use those contributions were put (if any) throughout the relationship.

About the author

Brett Hartley

Accredited Family Law Specialist

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