How post-separation assets are treated by the Family Court?
The date of separation, and therefore, the timing of a contribution to an asset made post-separation by one party, can be very relevant.
A ‘post-separation contribution’ is a contribution made by either one or both parties to the assets, liabilities or superannuation of the parties, or to the care and welfare of the children of the parties, between the date of separation and the current date (or the date of the trial).
The court must take into account this type of contribution given that between the date of separation and the relevant date the parties the value of assets of the parties may increase or decrease (in some cases, significantly), and in the interest of fairness and equity, a court must examine this change carefully.
The value of the assets
A change in the value of the assets may be attributable to a number of different factors including but not limited to:
- The activity (or lack of activity) by either one or both of the parties – good or poor management of an asset or liability;
- Savings by one party from income earned from their employment;
- Market forces;
- Disproportionate contributions to an asset or liability by one or both of the parties;
- The special skill of one or both of the parties;
- Good fortune.
- However, post-separation contributions can also come in the form of:
- Having the sole and/or primary care or control of the children of the marriage;
- Financial contributions (or lack thereof) to the maintenance of those children.
The weight that is to be given to post-separation contributions is a difficult question for the courts and a contentious issue for the parties involved.
This can be made even more difficult when the post-separation contributions that are being considered are the financial contributions of one party verses the contribution as homemaker and parent of the other party.
Read more on how assets are valued during separation.
Things to know about post-separation contribution
In order for a post-separation contribution to be taken into consideration by the court, parties should be aware that:
- There is an ongoing duty of disclosure that continues post-separation. The values of assets will continue to be revised up until the time your matter settles (or in some cases, the time of the trial);
- The net property pool includes all assets, liabilities and superannuation at the time of separation and any growth in those values post-separation;
- It is necessary to keep records of all contributions made, and, if the date of separation is in dispute, all records or evidence supporting the date of separation;
- Assets acquired post-separation are not ‘quarantined’ or removed from the matrimonial asset pool – rather, there is an assessment of each of the parties’ contributions to those assets;
- In some cases, the courts will adopt an asset-by-asset approach to assess each party’s contribution to a particular asset; and
- Contributions as homemaker and parent will be very relevant and can offset other financial contributions (whether made pre or post-separation)
Making assessments as to post-separation property can be complied, therefore it is important to seek legal advice from an expert separation lawyer prior to formalising agreements as you may be giving up something valuable.