How to protect yourself financially in a divorce

Married for 17 years, the South Australian man said he was manipulated and wants to stop his ex-wife from taking all his money.

Welcome to Sisters In Law, news.com.au’s weekly column solving all of your legal problems. This week, our resident lawyers and real-life sisters Alison and Jillian Barrett from Maurice Blackburn advise a man on how to deal with nasty divorce proceedings and the law surrounding the division of assets.

Question:

My wife and I were together for 20 years, married for 17. We recently broke up as I was sick of her bullying and manipulation. It was like I woke up after years of being under her spell. We’re now in the process of getting divorced and she, very predictably, isn’t making things easy for me. I suggested we split everything 50/50, including the home we lived in for our entire relationship.

However, she says that because her aunt gave us the deposit to buy it, that it’s all hers.

She’s also claiming that half of my superannuation is hers because she had a career break to have our kids. How do I stop her from ruining my life further and taking all my money? – Steven, SA

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The women is claiming half his superannuation and that the house is all hers because her aunt gave her the deposit. Picture: iStock.

Answer:

We’re sorry to hear you’re going through a difficult separation Steven.

If you are able to reach an agreement with your estranged wife on how your property should be divided, without having to make an application to the court, it will be a much cheaper and usually quicker process.

If you can reach an agreement, then you should formalise that in the Family Court by applying for consent orders.

However, based on what you’ve told us, it sounds unlikely that you’ll be able to reach an amicable agreement. This means you’ll need to apply to the Family Court for orders about the division of property. This application must be made within 12 months of your divorce becoming final.

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It’s likely they will need to apply to the Family Court for orders about the division of property because they can’t come to an agreement. Picture: iStock

You haven’t mentioned whether you have a binding financial agreement (known as a ‘pre-nup’) that was entered into prior to your relationship commencing. Sometimes these agreements are not drafted properly and, as such, aren’t binding. Pre-nups are also relatively rare, so we’ll work on the basis you don’t have one.

Property usually isn’t divided by the court using a precise formula, or a 50/50 split. All property is considered, including cash, real estate, superannuation, property owned before the marriage, cars, gifts, and inheritances.

Financial contributions (such as wages and investments) and non-financial contributions (such as homemaker and primary caregiving responsibilities) are all considered. So even though your wife had time off to have your children, this will be considered a non-financial contribution and she won’t be penalised for that.

To determine a property settlement, a court will:

• Consider whether it is just and equitable to make a property settlement order

• Look at the value of all assets and liabilities

• Assess the contributions each of you made to the property (including physical labour from things like renovations)

• Consider your and your wife’s age and health, whether you’re each earning an income or have the potential to, the length of your relationship, if either of you are living with someone else (plus that person’s financial circumstances), and

• Distribute the property between the parties based on the above.

The two main items from the property pool you’ve asked about is your home and your superannuation.

All property is considered, including cash, real estate, superannuation, property owned before the marriage, cars, gifts, and inheritances as part of divorce proceedings. Picture: iStock

Firstly, due to the length of your relationship and if neither of you had substantial superannuation at the beginning of your relationship, your and your wife’s superannuation will likely be added up, divided by two, and then split so that whoever has the higher balance has to make a payment to the other person’s fund of choice.

This would mean you both have an equal balance.

In relation to the gift from your wife’s aunt, then the intention of the gift will have to be examined. If her aunt intended for the gift to be for both of you then it will be taken as an equal contribution. If her aunt had provided a cheque on settlement and the property was in both of your names, or had deposited the money in a joint bank account, then it’s more likely that the gift was intended for both of you.

If, however, the aunt had stated that the gift was so her niece had somewhere to live and had provided it to her with, for example, a letter stating her intention that it was a gift for her only, then it would likely be considered a contribution that your wife made to the property pool.

Seek legal advice from Legal Aid, a community legal centre or a law firm to ensure you are receiving what you are entitled to. Picture: iStock

You should also note that the value of significant financial gifts, such as the deposit for your home from your wife’s aunt, can ‘erode’ or ‘diminish’ over time.

As you’ve been together for such a long time, your wife’s claim that the gift was solely hers has likely eroded, particularly when you’ve both contributed to the property pool and mortgage payments over that time.

You should seek legal advice from Legal Aid, a community legal centre or a law firm to ensure you are receiving what you are entitled to.

There are also independent family dispute resolution practitioners available that can assist you and your wife to come to an agreement.

This legal information is general in nature and should not be regarded as specific legal advice or relied upon. Persons requiring particular legal advice should consult a solicitor.

If you have a legal question you would like Alison and Jillian to answer, please email [e-mail].

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