Divorce & Property settlements

[Ricardo29]

Hoping for an answer on some scenarios please:

A. My PPOR. purchased and paid for prior to marriage. Wife and i divorce, what is she entitled to ? 50%? and when/how...IF i sell it, must i sell it etc??

B. My PPOR, girlfriend lives with me, lets say for 11months. doesnt pay rent, separate bank accounts etc. what is she entitled to if we split? i would hope nothing, although i here some saying 50% ??

C. similar to B, but she pays rent, and lets say been going 3yrs so might be more of a proper 'defacto' relationship.

D. a small business. been going say 10yrs prior to meeting/marrying. we divorce, is the wife entitled to half the business?? once again, how, when, what if i never sell it etc.....

and no its not me... just using 'my' 'we' etc as easier to explain

 

[Goldminer]

Splits can be very unpleasent

A guy i know had purchased his own PPOR alone in 1989 (peak of last boom) 50kms from Melb CBD paid 80k. 2 years later had a girlfriend of 6 months moved in she was a student at the time, parents did not approve so he ended up supporting her, even paid her Uni fees. After 18 months she moved out she said thanks for everything i dont want your house etc. Within 1 week her parents friends and an evil solicitor came with a request that she be given half the house. A bitter battle was fought for a year, the house was put on the market for much less than purchase price as the property market was in decline in that area at the time. Eventually his Mother purchased the property and rented it out. She was paid out to value of the equity, he had to pay the legals and was left with nothing. The courts justification was that she had done some cooking cleaning etc so was entitled to her share. People that knew this couple claim she spent more time doing homework for UNI than cooking or cleaning. This is a very true story that is quite unfair.
Would not want to scare anyone about divorce or assets division.
I have heard you cant take a partners assets until 2 years but, you do here of similar stories all too often.

 

[Monopoly]

Hoping for an answer on some scenarios please:

A. My PPOR. purchased and paid for prior to marriage. Wife and i divorce, what is she entitled to ? 50%? and when/how...IF i sell it, must i sell it etc??

B. My PPOR, girlfriend lives with me, lets say for 11months. doesnt pay rent, separate bank accounts etc. what is she entitled to if we split? i would hope nothing, although i here some saying 50% ??

C. similar to B, but she pays rent, and lets say been going 3yrs so might be more of a proper 'defacto' relationship.

D. a small business. been going say 10yrs prior to meeting/marrying. we divorce, is the wife entitled to half the business?? once again, how, when, what if i never sell it etc.....

and no its not me... just using 'my' 'we' etc as easier to explain

Hi Ricardo29,

Firstly in any dispute involving the division of assets, it is never totally "cut and dry" although some may say otherwise. But assuming the worst (not in your situation of course, but in your hypothetical):

a. Generally what you bring into the marriage is yours to keep, however, as your spouse, she is entitled to a portion of that based on several factors, eg. contributions throughout the marriage (eg. she contributed some of her own earnings to help repaint, recarpet etc etc), or maybe she stayed home and maintained its condition in good form. You do not have to sell anything in a settlement, if you have enough money to buy her out, then you pay her what portion the court deems she is entitled to and you keep (sad I know) what was yours 100% to begin with.

b. Scenario be <2 years not really recognised as "defacto" (although many will argue otherwise). The law "used to" state it had to be min. 2 years in a "defacto" relationship before any claim could be made on the other's assets, and unless that has been reduced since I last checked, I believe it still stands. So regardless of whether she paid rent or not, she is entitled to zippo!! However, as per:

c. If it was beyond 2 years AND you have documents to prove she was a boarder/tenant etc, then that strengthens your case in giving over nothing (but you had better be sure you declared this extra income in the meantime, otherwise you will find the ATO on your case AS WELL as the divorce/property lawyers).

d. Is your partner a "share" holder in the business?? If so, she will have a claim on it. If she is not, she may still have some claims she can make but it will depend on your relationship and how much she has done to support your business and/or your ability to keep it going. In other words, maybe she helped out, or maybe she provided some service at home (ie. ironing of your work shirts or washing of uniforms etc) thus enabling her to make a claim. But if you paid her for these services, she will not necessarily be entitled to anything for providing same, as she was legitimately PAID for doing the things she did. As long as you have document evidence that she was a paid employee/hired help, no problem.

As you can see, and as I said from the beginning, it is not "cut and dry" and "out of court" settlements (amicable agreements) are always the best and CHEAPEST option all round.

I'd wish you luck, but you ain't gonna need it, right??

Cheers,

Jo

 

[Ricardo29]

tks the start...
really would like to hear more, real life examples if possible.
(without turning into a moralistic/love/chauvenistic thread..)

lets just assume its me for a minute ,and i want to get married.

my house, my business. both of which i worked my ar.se off for, and are worth a lot (to me anyway, its all relative right)
we marry. there is of course a 40% chance we'll divorce, probably higher knowing my track record.
assume she is just a normal housewife (remembering of course i do work around the house as well, mow the lawn, cook etc so it should all equal out) assume she has nil input into the business...what hope have i got?

 

[alexlee]

Does Australia enforce prenuptual agreements like say, the US? If not, put everything in trust for your kids.
Alex

 

[JoannaK]

I would be inclined to explore the prenup avenue, and establish a trust where only your bloodline can benefit.

 

[lizzie]

as mono said - it's never cut and dry. however, i believe defacto is now down to 12 months.

i also believe that what you owned before the marriage is not automatically exempt when working out who gets what from any break - especially if you've been together for a long period of time. the court looks at contribution, whether this be financial or physical. and nobody wins!

the best bet would be to get a prenup drawn up. my partner and i did this as soon as we started living together because we had both come out of messy divorces and he came into the new relationship with a house (after losing his old one to the ex) and i came in with money. the solicitor did advise at the time that prenup were not enforcable in australia but they did show intent if anything went to court. however the agreement is not relevant now, 8 years later, as we don't own that house anymore and have bought and sold over a dozen ips in the meantime and have a good sized portfolio.

 

[natmarie73]

I'm not a lawyer but...

From what I have read each case is looked at individually and the situation of each party is taken into account when dividing assets. If you have a read of some of the decisions made by the family court throughout the years here

http://www.austlii.edu.au/au/cases/cth/family_ct/ and http://www.familycourt.gov.au/presence/connect/www/home/judgments/

you will see that in some cases the husband gets more than the wife and in others the wife gets more than the husband. Other factors that can influence a decision is whether or not there are children, whether or not the wife works or has earning capacity and who contributed to the asset pool in what percentage etc.

In a situation I know of (friend of a friend). The bloke (divorced) can't sell his property until his daughter reaches the age of 16 as to do so earlier means his exwife will get some of it (not sure how much). If he sells it after his daughter is 16 he can keep the whole lot. I believe his ex wife already got most of the family home during the divorce as well and this property falls under the child support regulations umbrella.

I think the safest way to protect assets you own before getting married is through a company or trust structure but maybe even this is not safe enough. Whatever happens, I think the lawyers end up with the bulk of it anyway

cheers
Nat

 

[DaleGG]

Off topic a little and a different way of thinking about things.....

Hi

This is a little different to what has been asked....and I apologise for that. But, I thought it might be worth mentioning another thought.

There are three people that you cannot protect yourself against:

the bank when we want them to lend us money to buy assets
the tax office
our spouse

So, being aware of this, I generally receommend that we get on with the job of doing what we can to accumulate wealth and assets and forget about what our spouse may or may not do to us.

In fact, in my own personal situation, I go one step further. I have promised to give Sue absolutely everything should we separate. Why??

In deference to the relationship that we had
In deference to our children who I do not want to suffer
To NOT give it all to solicitors as I have seen previously when couples argue

And, because I know how to get it all back again because I have learnt how to invest and accumulate assets and as such, I believe that it would happen a lot quicker the 2nd time around.

Divorce happens. Loss happens. I think it is best to get on with making the most of each day as it happens and not worry about what might happen when there is nothing we can do to stop the courts from doing their worst to us.....

Good luck.

Dale

 

[Todd]

Hi Dale,

I thought i read somewhere in your book that if a trust was set up before the relationship, then the assets held in that trust would be safe?


What about if a HDT or number of HDT's where owning all the property and other assets, and then a prenup was put in place that said all assets held in the trusts are off limits providing no financial input from the mrs'. Could this work?

 

[DaleGG]

Hi Todd

This is a question best directed to a family law solicitor, I am afraid.

Yes, I understand that in some circumstances assets acquired within a trust structure established before a spouse comes along may be exempted from distribution as ordered by a family court.

However, in the meantime, many dollars will be spent in legal fees fighting over the issue. In fact, the legal fees may be more expensive than the assets saved or protected.

To be honest, I still believe in using a structure to protect assets from outside attack and with the future in mind; but, then accept that your spouse (who you marry "for better or worse") may take a good portion from you if you part.....

Once it is accepted, then you can get on with accumulating enough for her/his share to not to matter anymore, or.....

looking after your spouse so that that they don't take it from you )

Having said this, I respect that divorce is a highly emotional time and that things are said and done in the anger of the moment when we are wronged....

Just some thoughts

Dale

Hi Dale,

I thought i read somewhere in your book that if a trust was set up before the relationship, then the assets held in that trust would be safe?


What about if a HDT or number of HDT's where owning all the property and other assets, and then a prenup was put in place that said all assets held in the trusts are off limits providing no financial input from the mrs'. Could this work?

 

[duncan_m]

looking after your spouse so that that they don't take it from you )

And for many women this means turning into a sycophantic, oppressed, downtrodden second class citizen.

 

[Todd]

Thanks Dale,

Ill have to check up on that with a family law solicitor.

 

[Ricardo29]

assume for a minute simone was playing around, as opposed to shane (supposedly of course...).
if warnie wanted the divorce, would he still have to give her half??
does reasoning have anything to do with anything eg. infidelity etc??

 

[duncan_m]

assume for a minute simone was playing around, as opposed to shane (supposedly of course...).
if warnie wanted the divorce, would he still have to give her half??
does reasoning have anything to do with anything eg. infidelity etc??

Simone could have slept with the entire West Indian Team, wouldn't have changed anything.. we have a "no blame" system in Australia.

 

[Ricardo29]

do we have a "justice" system in australia?

 

[kathryn d]

Is your partner/spouse bringing into this relationship any money , assets?
Are they comparable to yours?
What about turning your current PPOR into an IP and putting mutual resources into a new PPOR.
Or you could rent a place to live so as not to have a "matrimonial home".

My ex always assumed if we split I'd "take him to the cleaners". I'm proud of the way we handled our divorce, We lived in the house for a years after we separated while we waited for the divorce to be final. Whoever lived in the house with the children got the privledge of paying all their expenses without child support. We both pay our share of the taxes and insurance and maintenance but when our youngest child finishes high school the house is to be sold and split evenly.
The first time we almost separated , a lawyer on my behalf got involved and they wanted to make it nasty. I didn't want that.
The second time we split we decided to come to an agreement ourselves.

Marriage breakdowns can be nasty but they don't have to. Pick your partner well.Are they vindictive?What is her character like now?

My new husband and I brought the same value of assets into our marriage.He knows how I deal with divorce. He knows if our marriage ever broke down I only want HALF. Nothing more.

Good luck
Kathryn

 

[AlmostBob]

do we have a "justice" system in australia?

Of course not, there is a Legal system in Australia.
Lawyers put people to battle
and the one who fights dirtiest gets most, and the lawyers get most of that.

 

[Lplate]

A child could change all of the above.

Doesn't have to be yours either.

It was good advice from Kathryn to select well.

Good luck from me too.

LPlate

 

[grubar30]

Yes, I understand that in some circumstances assets acquired within a trust structure established before a spouse comes along may be exempted from distribution as ordered by a family court.

However, in the meantime, many dollars will be spent in legal fees fighting over the issue. In fact, the legal fees may be more expensive than the assets saved or protected.

Yes, but the ex will be spending as much money fighting the battle as you do. And as much as its going to hurt you, its going to do the same to them. So your only chance of saving your assets may simply come down to your will to spend more than your ex. And if that’s what it takes then so be it.

George