Family Law issues affect most of us at some point making it one of the most talked about areas of law. However, many opinions or beliefs about Family Law are built on myths and misunderstandings rather than experience or knowledge, thus making it not only the most talked about but also least understood area of law.
To help you understand the process a little better we break down some of the myths and untruths.
Myth 1 – Property is always divided equally
There is no 50/50 rule in family law matters and there is no mathematical formula used for dividing property between the parties. Guidelines under the Family Law Act are used to determine the division of property. While an equal split may seem fair, that is often not the case. As an example, the person who has given up their career to care for the children would be worse off with an equal distribution. Their ability to restore their earning capacity to be equal to that of the partner who has continued in the workforce is often reduced. Section 75(2) of the Family Law Act examines the future needs of both parties in order to determine who has the greater need as a consequence of the marriage or relationship. Other factors that may come into play when deciding the distribution of property are: the age and state of health of both parties; which party has care and control of the children; the length of the marriage or relationship and its impact on earning capacity;
Myth 2 – If separation is the other persons fault they will be the one who pays the price
The Family Law Courts do not consider which partner was at fault in the marriage breakdown. In 1975, the Whitlam Government introduced the Family Law Act and for the first time in Australia, people could get divorced without having to prove that one party was at fault.
The fact that a spouse may be perceived by the other party as being at fault (eg through infidelity), being lazy or not good with money will not usually impact on the issue of property settlement. There may however, be instances where the behaviour of a party has had a significant impact on the value of the property available for division (such as deliberately running down a business or gambling away large amounts of money) and this may be taken into consideration;
Myth 3 – I can exclude my assets from settlement by transferring them in someone else’s name
Such a transfer will be viewed as an attempt to defeat a claim and may be set aside by the Courts. Therefore, it is not appropriate or advisable for a spouse to take it upon themselves to transfer ownership of an asset that they don’t wish to have included in the asset pool for distribution. It is also not appropriate to claim that an asset which is not registered in your name, but over which you have control (such as a family trust) is not your asset.
Myth 4 – Assets I obtain after we separate will not form part of the settlement
The Family Law Courts will only make property distribution decisions based on the financial circumstances of both parties at the date of the hearing, not the date of separation. One of the most important reasons to attend to a property settlement promptly is to finalise your financial ties to your spouse. Until finalisation of your property settlement all assets of the parties, whether acquired before, during or after the relationship has ended, will form part of the asset pool for distribution.
Myth 5 – I have to be legally divorced before we can settle property distribution
Once you become separated, you can immediately start negotiating a financial settlement with your spouse.
A couple must be separated for at least 12 months before they are able to legally apply for a divorce but this does not prevent a property settlement from going ahead. However once legally divorced, you will need to finalise your property settlement within 12 months from the date of divorce.
Myth 6 – The Mother always gets the children
It is often a belief that Family Court judges always favour the mother when it comes to parenting of the children. There is no legal requirement that children should be predominantly cared for by their mothers. It is often the case however, that after separation, mothers do tend to have significantly more overnight care of the children as compared to fathers. This is not always or even often ordered by the court. The majority of the time it is agreed between the parents. There are a number of sociological reasons why children tend to spend more time with mothers than fathers after separation. A common reason is to not unnecessarily disrupt the familiar routine that was in place for the children before separation.
Myth 7 – Binding Financial Agreements are a waste of time
Provided they are prepared and signed in accordance with the Family Law Act they are legally binding.
Put simply a Binding Financial Agreement acts as a record of what assets and liabilities each person brought into the relationship. It also sets out how the couple’s finances will be dealt with and divided in the event that the relationship breaks down.
A Binding Financial Agreement can be entered into:
• in contemplation of marriage;
• in contemplation of a de-facto relationship;
• during a marriage;
• during a de-facto relationship;
• after a marriage breakdown;
• after a de-facto relationship breakdown
If you are uncertain of your legal position in relation to family law matters, don’t rely on gossip from your neighbour or advice from your mate. Call us to make an appointment to discuss your unique situation.