Sometimes, clients seeking advice in family law cases can be surprised as to what the law expects to be included in the joint property pool of a separating couple.
Identifying the property pool
The starting presumption under the Family Law Act 1975 is that all property owned by the parties, either jointly or individually, whether acquired before, during or after the relationship, forms part of the joint property pool. In fact the Federal Circuit and Family Court of Australia (FCFCOA) has repeatedly referred to its power under the Family Law Act “to alter the parties’ interests in all their property, regardless of when or how it was acquired and in whose name it is owned”. This information can sometimes be jarring to clients with little familiarity with family law.
This means that the joint property pool can include:
Pre-marital property owned by a party – including both ‘real’ property (i.e. the family home and any investment properties), and other personal property owned by the respective parties;
A bequest received by a party during the marriage, or after;
A lottery win by one party;
A redundancy payment received by one party;
In other words, the default position is that all assets that were brought into the relationship by each party, as well as any assets accumulated during the relationship, form part of the property pool.
Note that once the extent of the joint property pool is ascertained, the law requires it be divided in a way that is “just and equitable”. For example, where a party has brought significant property and other assets to the relationship, it will often be the case that this results in a greater share of the pool apportioned to them to account for this.
Moreover, the family law system places considerable emphasis on encouraging parties to a family law dispute to settle by consent, and in these circumstances, parties often (though not always) will commence by each seeking to quarantine the pre-marital assets that they accumulated (if any).
Nevertheless, the point remains that the Family Law Act’s approach to the property pool is all-encompassing – there are no assets which are automatically excluded from the joint property pool and, by implication, from the jurisdiction of the Court. The parties’ respective contributions and future needs (among other things) are relevant to how the property pool will be divided, but they cannot, without consent from both parties, automatically act as a pretext to exclude any property from the joint pool.
Knowing this information upfront may assist clients in demystifying the asset division process in family law—and it may help you make decisions about when to pursue (or formalise) a property settlement with a former partner.
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