The law in regards to assets accumulated after separation can cause some confusion.
Many clients hold the strong view that what comes into their hands after separation should be excluded when calculating the division of property.
Unfortunately, this is not the case. The relevant value of the net assets of each party is at the date of settlement, or trial. This means that superannuation, savings, inheritances, employment payouts, compensation, lottery winnings and other assets including motor vehicles and furniture accumulated after separation do form part of the net assets available for division.
In the midst of confusion there is good and bad news. The party who has accumulated the assets after separation will in most cases be able to retain a high portion of those assets, as the assets were solely contributed by them. The other party will receive a small percentage more of the overall property than he or she otherwise would have. If the matter is decided at court, parties must expect some adjustment in favour of the less well-off party.
Of course, the other important issue to watch for is the accumulation of debt after separation.
A party who accumulates debt after separation will not necessarily bear sole responsibility for that debt if the division of property has not been formally settled. When determining the net assets for division, the debts of each party form part of those calculations. Again the party who has not contributed to the post separation debt cannot rely on debt incurred by the other party being excluded. The party who has not incurred or contributed to the debt will to a certain extent share in that debt when the division is calculated.
There is a requirement to make ongoing disclosure of all assets, liabilities and superannuation until settlement, or trial. Non-disclosure may be grounds for having an order for property division set aside with serious consequences for the offending party.
There is no exact science to the calculations for the division of assets.
Circumstances vary from one case to the next and the Family Law Act 1975 (Cth) sets out a wide range of considerations to be taken into account when property is divided. Importantly the requirement that the division of property is just and equitable in all the circumstances must be addressed.
To best avoid the situation of post separation assets or debts being factored into your property settlement, make every endeavour to formally settle your property sooner rather than later after separation. Contact DBH Family Lawyers to arrange an appointment.