MUST THERE BE A CAUSAL LINK BETWEEN CONTRIBUTIONS AND PROPERTY IN FAMILY LAW FINANCIAL MATTERS?

Home News MUST THERE BE A CAUSAL LINK BETWEEN CONTRIBUTIONS AND PROPERTY IN FAMILY LAW FINANCIAL MATTERS?

Step one in any family law property settlement is to identify and value the current assets and liabilities for each party, including any superannuation interests.

The second step is to identify and assess various types of contributions made by each party from the commencement of cohabitation up to and including the current date.

There is a common misconception amongst the general public, and even amongst some lawyers, that a contribution must be linked to an actual existing piece of property. There is no such requirement.

Whilst, one has to identify contributions to the acquisition, conservation and improvement of property, there are also other types of contributions, including contributions to the welfare of the family that must be considered. There are many types of contributions that by definition, simply cannot relate to specific pieces of property and nor are they capable of any mathematical certainty and calculation.

If for example, a couple are married for twenty years and build up an asset pool of say $1M, but lose all of that prior to separation. After separation and before any property settlement is finalised, one of the parties wins $1M in Lotto. Post-separation, that party who won the Lotto may argue that the other party has made no contribution to the post-separation Lotto winning. However, the Law will look at the contributions by the other party throughout the entirety of the relationship – those contributions relate to other pieces of property (even though they do not exist now, and include direct and indirect contributions to those previously owned properties). More importantly, if there are children of the relationship, the other party can point to contributions to the welfare of the family throughout the relationship and even post-separation that requires the Law to properly weigh and assess.

Often, we hear clients become upset and make statements such as “why should my wife get part of our family business, she has never done anything in the business?” The fact is one does not have to do anything directly in a financial sense to any piece of property to have a possible claim.

The contributions that must be looked at include contributions to the family, children and domestic contributions and also include indirect contributions and non-financial contributions to property. Most importantly, those contributions do not have to be tied to any particular piece of current existing property to be able to show a claim.

Each particular financial settlement for separating couples is different and the Law relating to contributions and how that is assessed against existing property is not straightforward. One should always seek expert advice from an accredited family law specialist as to their rights and entitlements.

About the author

Brett Hartley

Accredited Family Law Specialist

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