Author: Carol Pages, Pages Family Law.
Property settlements can be one of the most complex parts of separating from a partner. Many people assume that it is just about dividing up your assets, but Australian family law takes a more structured approach to ensure that the outcome is fair.
Earlier in this series we discussed how property settlements work How Do Property Settlements Work in Family Law in Australia? and explained the four step process used by the Family Court.
We’ve also explored why property isn’t automatically divided 50/50 Is Property Settlement After Divorce in Australia Really 50/50? and how fairness rather than equality determines the outcome.
We covered What counts as property in family law in Australia? as often in their first meetings our clients will be surprised by how broad the assets and liabilities in family law can be. Knowing what counts as property can set you up for success in resolving your matter efficiently.
Finally we have looked at Why Contributions Matter in Property Settlements? and explained that in addition to financial contributions, homemaker and parenting contributions, as well as contributions from third parties, can impact how your property is divided after separation.
In this final article, we look at the next step – how considerations relating to current and future circumstances, also known as ‘future needs’ – can impact your property settlement, and what you need to know.
Why is it important to consider future needs?
Property settlements are not only about the past. The law also looks at the needs of each of the parties into the future.
The future needs step helps ensure that the final outcome of the property division is not only based on what happened during the relationship, but takes into account the parties’ current circumstances, and what they are likely to need after the property division.
The Court considers matters such as income of each of the parties, their age, health, and arrangements for the care of children.
The goal is that the final outcome is fair, or in legal terms that the property settlement is just and equitable.
Frequently asked questions about future needs and the impact on property division
What are future needs in a property settlement?
After assessing the contributions made by each of the parties to the property of the relationship, the next step is to consider current and future circumstances.
Future needs includes considering the parties’ relative incomes, health status, age and care of children.
The law now also requires consideration of the effect of family violence on one party by the other, the impact of deliberate waste of assets, and where one partner has incurred liabilities, including the nature of the liabilities, and the relevant circumstances. It is important to note that liabilities are not referring to the usual mortgages or loans to acquire assets.
What is the impact of a future needs adjustment?
A future needs adjustment adjusts the outcome at the end of the contributions assessment step.
Consider these situations, which are commonly where a future needs adjustment would be negotiated.
Stay at home parent
Say that a couple started their relationship with minimal assets. They saved together and purchased a house, which they started to pay off. They decided to have children, and the wife took some time off work to raise the children. After separation, there are still pre-school aged children, and the wife has been out of the workforce for some years, and will be unable to return to work full time for some time. Assuming no other relevant factors apply, there would likely be a future needs adjustment in this case.
Retirement
One party has retired after a long working career. The other party is 10 years younger and continues to work. The retiring partner’s inability to continue to earn an income is likely to result in an adjustment.
Do future needs always change the property split?
Not always.
In some cases the Court may decide no adjustment is necessary.
In family law, each case depends on its own individual facts and circumstances.
Summary
Property settlements involve more than just dividing up the assets. The law looks at the full picture including contributions at the start of the relationship, during the relationship and the circumstances of each of the parties both now and into the future.
Understanding how all of this works can help you to approach your property settlement with greater clarity and confidence.
If you are navigating your separation and want to understand how the law will apply to your case, getting early legal advice can help clarify your options and next steps, and reduce uncertainty.
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The content of this article is provided for information purposes only and does not constitute legal advice. We recommend that you seek legal advice relevant to your own circumstances and we would be happy to assist you.
Carol Pages is the Principal of Pages Family Law and an Accredited Specialist in Family Law. If you would like advice about your own separation, please contact Pages Family Law at info@pagesfamilylaw.com.au or on 03 9121 8077 or book a 15 minute free discovery call via our website.
