Four Step Process for Dividing Net Marital Assets
In determining how net marital assets will be divided following a separation, the Court looks to ask a number of questions as to how the assets will be divided.
In all property settlements there is a four step process to determine how assets should be divided. The process is:
- Defining the net asset pool of the parties;
- Determining the various contributions of the parties to the relationship;
- The parties future needs, and
- Whether the result of the division of property will be just and equitable in all of the circumstances.
First Step - the asset pool
In or to determine the asset pool of the parties the parties will be asked to prepare a balance sheet. A copy of that balance sheet can be found at the Family Court website (http://www.familycourt.gov.
Second Step - contributions
The Court looks at a number of contributions of the parties including:
- Financial contributions.
- Parenting contributions
- Homemaker contributions and
- Non financial contributions.
Financial contributions include who was the major breadwinner and who provide the funds for the purchase of net marital assets. Parenting contributions involve looking at who had the primary role of looking after the children during the relationship. Homemaker contributions includes looking at who did the majority of the homemaking tasks, including the running of the household and the necessary chores around the household. Non financial contributions include work that a party has done to improve the value of the assets, i.e. undertaking renovations to the property at their own expense.
Third Step - Future Needs
Following a determination of the contributions the Court will also make an adjustment to the contribution percentage by having regard to the future needs of the parties. There are a number of factors taken into account in determining a party’s future needs. These are colloquially known as Section 75 (2) factors and include but are not limited to the age and health of the parties, income, property and financial resources of the party’s, whether either party has the care and control of a child of the marriage who has not attained the age of 18 years, etc.
Fourth Step - Just and Equitable
The final step in determining a property settlement is the determination of whether the outcome is just and equitable in all of the circumstances. If the Court determines that the outcome is just and equitable having made account of all the circumstances then the process of dividing the assets is complete. If the Court is not satisfied that the result is just and equitable in all the circumstances then the Court will make a further adjustment to ensure that the result is just and equitable.
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