The 50/50 Myth in Divorce: Will my ex Wife/ Husband Automatically receive 50% of the Joint Asset Pool at Separation?

Learn how assets are divided after divorce in Australia. Debunk the 50/50 myth and understand key factors influencing asset splits.

A common misconception in family law matters is that once married, each party is automatically entitled to 50% of the joint asset pool that exists at separation. Contrary to popular belief, there is no presumption of ‘50/50’.

The Family Court of Australia and legal practitioners consider several key factors when dividing assets after separation, including:
  • Financial Contributions: The financial contributions each spouse made to the relationship, such as income or savings.

  • Non-Financial Contributions: Contributions that aren’t directly financial, like homemaker duties or childcare responsibilities.

  • Future Needs: The financial needs of each spouse, including their earning capacity, living expenses, and any ongoing responsibilities.

  • An overall assessment of what is “just and equitable”.

Given the complexity of these factors, we recommend seeking advice about any property division from a Specialist Family Lawyer. An experienced lawyer can provide expert insights as to your rights and obligations, and help you achieve a fair outcome tailored to your unique circumstances.

Eligibility for Property Division

The Federal Circuit and Family Court of Australia (“The Court”) has jurisdiction to hear and determine applications to alter the property interests of parties following the breakdown of either a marriage or de facto relationships.

De facto Relationships

In order for the Court’s jurisdiction to apply to a de facto relationship, parties to the relationship must have lived together for at least two (2) years.

If the period of cohabitation is less than two (2) years, you may apply to the Court to alter the property interests which currently exist between you and your ex-partner if:

  • there was a child born of the relationship,
  • the relationship was registered under a prescribed law of a state or territory, or
  • the financial contributions of one (1) party were so significant that the failure to make an Order would result in a serious injustice.

Time Limits

Following separation, a party to a de facto relationship has two (2) years to bring either an application to alter property interests or spousal maintenance claim.

For a married couple and following the making of a Divorce Order, either party to the marriage has 12 months to make an Application to the Court for a property adjustment or spousal maintenance claim.

It is possible to bring an application ‘out of time’, however, if you fall into this category, you should urgently contact a specialist family lawyer to obtain tailored advice in relation to your circumstances and potential legal options.

Debunking the 50/50 Myth in Divorce

Each property matter is unique, with the overall division of assets being determined by party contributions, future needs and an overall assessment of what is “just and equitable” or “fair” in all the circumstances of the matter.  There is no automatic obligation or entitlement for the parties to receive an equal 50/50 split.

Relevant Factors in Asset Division After Separation

In making an assessment about each parties’ entitlement, the Court will consider the following factors:

Financial Contributions and Divorce Asset Division

The Court will consider what the party’s entered the relationship with, as well as any assets they obtained throughout the relationship.

For example, if Party A entered the relationship owning their own property, this would likely be considered a  financial contribution in Party A’s favour. The equity (i.e. the asset value minus any liability secured over the property) in Party A’s property had at the commencement of the relationship may be relevant to the overall asset split.

The overall length of the relationship will also determine the weight (or importance) given to an initial financial contribution. Generally speaking, the longer the relationship, the less weight will be given to the initial financial contribution.

Large financial contributions contributed by one (1) party throughout the relationship will also be relevant. This often includes if one (1) party receives any large lump sum payments such as an inheritance, a redundancy or a workers compensation payout.

In some cases, it may be relevant to the Court to note that one party’s ability to financially contribute to the relationship was inhibited due to family violence.

How Parenting and Non-Financial Contributions Affect Asset Division

It is common for one party to be the primary income earner and the other party to be the primary homemaker and parent. The age and number of children of the relationship will also be relevant in determining an overall asset pool split.

Other factors to consider may include, who was responsible for:

  • tending to the home,
  • preparing meals, and
  • general property upkeep.

Future Needs in Divorce Property Settlements

Each party’s future needs will play a significant role in determining the division of a joint asset pool.

Relevant factors to your matter may include:

  1. The age and ongoing care needs of any children to the relationship;
  2. Whether one parent is acting as the primary caregiver of the children;
  3. The ongoing health and medical needs of each party;
  4. Whether ongoing medical needs may inhibit on either party’s ability to work;
  5. The current income and earning capacity of each party;
  6. The proposed ongoing parenting responsibilities;
  7. The age of the parties; and
  8. The personal living circumstances of each party. For example, whether one (1) party has re-partnered and is relying on the income of a new partner.

Each property division case is unique, with the final division of assets depending on a variety of factors, including financial contributions, non-financial contributions, future needs and an overall assessment of what is “just and equitable”.

Given the complexities involved in dividing assets after separation, we strongly recommend speaking to an experienced family lawyer as soon as possible. Doing so will help you understand your rights and obligations, and ensure you receive the guidance needed to achieve a fair and tailored outcome in your property settlement. Reach out to us for expert advice and support throughout this process.

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The information in this article is not legal advice and is intended to provide commentary and general information only. It should not be relied upon or used as a definitive or complete statement of the relevant law. You should obtain formal legal advice specific to your particular circumstance. Liability limited by a scheme approved under Professional Standards Legislation.

Author
Associate Solicitor
Family Dispute Resolution Practitioner