Property’s big impacts after a marriage turns sour

More people are divorcing after decades of marriage, and pain on the property front is something that many must confront.

It was Hugh Jackman’s recent break-up that triggered a new wave of disbelief.

The Aussie star’s split with wife Deborra-lee Furness after 27 years of marriage sent shockwaves through households across Australia where countless wives – including mine – had listed Hugh as their hall pass.

My disbelief was not that my own 29-year marriage was now under threat from Wolverine’s romantic advances, but was more around why are so many seemingly strong, long relationships collapsing in our modern world.

Australian Bureau of Statistics data show that the median age of people divorcing has jumped sharply since the 1980s – from 36 to 46 for mean, and from 33 to 43 for women. The trend has been labelled grey divorce, perhaps unfairly given the popular use of hair dye by those in their 40s, 50s, 60s and beyond these days.

A home cannot be cut in half in a divorce. Picture: iStock

Apart from the emotional turmoil of divorce, the financial fallout can be huge – especially around peoples’ biggest asset – their real estate.

Older divorces mean people have had more time in life to build up large and complex assets that must be sorted in a separation, and property is no exception.

Property buyers agent Michelle May says since 2022 single female buyers have been the fastest-growing homebuyer group in Australia, partly driven by rising divorce rates among those aged over 45.

In 2021, those married for 20-plus years constituted over a quarter of all divorces, and Ms May believes the trend is here to stay because of women’s evolving financial independence and changing views on relationships.

“Property ownership is about establishing financial autonomy and a safety net,” she says.

However, a family home cannot be cut in two like bank deposits or superannuation nest eggs, so older divorcees must work through who lives where, and in many cases a large home gets sold and both ex-partners downsize into lower-maintenance properties.

That can remove tax complexity, as family homes are exempt from capital gains tax while other property is not. Financial and legal advice is vital.

“Before making any decisions, it’s important to get a professional valuation of your property.,” Ms May says.

“Selling might seem like the most straightforward solution, but renting out the property or buying out your partner’s share are also viable choices.”

“Consider how your future housing needs might change and plan accordingly.”

Australian Family Lawyers principal lawyer Adrian Curtis says older divorces are often messier financially.

“In most property settlements neither party comes away having won,” he says.

“Both parties will typically have the ability to rebuild themselves and their financial situation.

Hugh Jackman and Deborra-Lee Furness split after 27 years of marriage. Picture: Tiziana Fabi

“In older couples, however, this capacity is reduced. Therefore, the outcome becomes much more contentious as each party is seeking everything they can from a limited pool, knowing that they made need to live on this for a long time to come.”

Mr Curtis says older divorces can mean that normal options, such as buying an ex out of a property, won’t work, so people need to be more flexible.

“Reaching a conclusion about an outcome may not assist if you only find out after the fact that you can’t borrow enough to meet your obligations under the agreement,” he says.

Older couples also should consider their cash flow, which typically shrinks in retirement, and whether banks view their age as a barrier to borrowing.

Hugh and Deborra-lee won’t have to worry about that – their fortune has been reported to be at least $400 million – but property division is something that many of the 100,000 plus Australians divorcing each year will have to keep in mind.