How much am I entitled to?

Let us assume for a minute you have separated and there is one burning question you must simply ask, namely how much am I entitled to?

You go and see a lawyer and more likely than not leave terribly deflated.

Why?

Because you may not have heard what you wanted to hear, or you were given a range of possibilities and not the magic figure you were after. Sadly, there is no mathematical formula to work out what any one is entitled to at the end of a relationship, but steps we follow.  

This post is to reiterate what your lawyer probably told you and may or may not have taken in at the time.

The way the family court works out a property settlement under the Family Law Act 1979 is as follows:

1.       What is the asset pool? The first step is to identify what everyone owns jointly or separately (less any debts). Property includes cash, shares, business interests, real estate, investments furniture, motor vehicles and superannuation (not an exhaustive list).

2.       Assess the contributions of each party prior during and after the marriage/relationship. This includes financial and non financial contributions of the parties. For example if someone owned an asset before they started living with you, this will be taken into consideration, as will lump sum payments received during or after the separation. Once the contributions have been assessed they are given a percentage value.  This step will be discussed in more detail in later posts.   

3.       What, if any, future needs are there?  In this step the court looks at the age and health of the parties, income and financial resources, if either party has to care for a child, the duration of the marriage and the capacity to obtain gainful employment (again to name but a few).

4.       Is it just and equitable? This is the step least able to be predicted by lawyers. In this step a Judge or Magistrate has to examine if the proposed orders are fair (more often than not client’s tend to think the entire outcome is not fair). It is important to remember the court has wide discretion to make an order that it considers proper in all of the circumstances.

 If you understand the process of how a decision is made it can help you understand why a lawyer cannot simply give you a figure and tell you how much you are worth.

Family lawyers often talk about ranges and percentages, leaving you, the customer, confused and unsure.

Sometimes a better approach in this situation might be to work out what you need to make the world go around and use that as a starting point.

To give an example of how getting stuck on a percentage can be of no use, we highlight a case where a mother of young children wanted over fifty percent of the asset pool. One of the reasons was she had the primary care of three young children and limited earning capacity.

The husband had brought the assets into the relationship, reducing the wife’s direct financial contributions and it was a relatively short relationship, lasting in total about six years.

 The lawyers (for both sides) agreed the case should be decided around thirty five percent. None of the settlement mediations brought the parties any closer together, each getting more entrenched in their position. Finally, after spending over fifty thousand dollars each, a final decision was made giving the wife less than fifteen percent of the asset pool. Despite the decision being an appealable one, the wife chose not to appeal.  

Perhaps if the case had started with each party not focused on what percentage they were after, it might have produced a better outcome for the wife.

When you take a firm stance about what you think you are entitled to, make sure you are prepared to be disappointed. A lawyer should never promise you an outcome or assure you that you are worth a particular percentage, as this will not help you try and negotiate a settlement you are able to live with.