Family Law property settlements involve the division of assets that have been accumulated while a couple is married or in a de facto relationship.
The 'asset pool' is a concept used to divide the property in a value-neutral way, meaning no one spouse is advantaged or disadvantaged.
To ensure a balanced division of assets, it is important to understand the principles of dividing an asset pool by the Family Law Act. In this article, Justice Family Lawyers will guide readers through the key points to consider when dividing an asset pool in the context of a Family Law property settlement.
What is an Asset Pool?
An asset pool is often referred to as the 'assets and liabilities' of a couple.
It is the sum of all of the resources accumulated by a couple throughout the marriage or de facto relationship.
This includes any financial or real property such as the family home, and can also include other items such as shares, trusts, and vehicles. The asset pool also includes any debts owned by the couple.
We find that it helps clients if they use a spreadsheet or table to put all of their assets and liabilities on a balance sheet so they can see clearly what needs to be split.
A balance sheet can be a valuable tool in achieving a financial settlement during a breakup because it provides a snapshot of a person's financial position.
Example of Assets for Division in a Pool
- Real estate: This can include residential or commercial properties, land, and any improvements made to the property.
- Personal property: This includes tangible items such as furniture, artwork, jewelry, vehicles, and other personal possessions.
- Financial assets: This can include bank accounts, shares and superannuation.
- Business: If one of the parties owns a business, the value of that business may be divided as part of the asset pool.
- Debts: Any liabilities or debts associated with the parties.
Assets are typically divided in a divorce based on factors such as equitable distribution laws, prenuptial agreements, and the specific circumstances of each case.
A property settlement lawyer can play a vital role in helping you with the division of assets during a divorce by maximising the amount you receive from a property settlement.
Family lawyers typically charge between 10 – 30k for their services, meaning that if they can negotiate an amount or obtain an amount higher than that, it would be a good idea to engage one.
Two Pool Approach Family Law
The "two pool approach" in family law, particularly in the context of Australian family law proceedings, is a method used to deal with different categories of assets during property settlement disputes in a divorce or separation.
This approach recognizes that not all assets and financial resources should be treated the same way for the purposes of division.
Therefore, assets are categorized into two distinct "pools" for evaluation and distribution.
Pool 1: Matrimonial Assets
This pool typically includes assets that have been accumulated or improved by the efforts of both parties during the relationship.
It can comprise the family home, bank accounts, investments, vehicles, and other tangible properties.
These assets are usually considered joint contributions and are subject to division based on the principles of fairness and equity.
Pool 2: Special Contributions or External Resources
The second pool consists of assets that may have been brought into the relationship by one party, inheritances received by one party, personal injury settlements, or gifts.
These assets are considered separately because they are not the product of the joint financial efforts of the parties in the same way as the matrimonial assets.
The division of these assets takes into account the nature of the contribution and its impact on the overall financial circumstances of the parties.
The "two pool approach" allows for a more nuanced and equitable division of property by acknowledging that different assets may have different origins and significance to the parties involved.
It provides a framework for acknowledging individual contributions and external factors that should influence the settlement outcome.
However, the application of this approach can vary significantly based on the specifics of each case, and the discretion of the court plays a crucial role in determining how assets are categorized and divided.
The objective remains to achieve a just and equitable division of property that reflects the contributions made by each party to the relationship, both financial and non-financial.
Conclusion
Justice Family Lawyers have the specialist knowledge and experience to assist you in understanding these complexities and providing you with the best possible outcome in a Family Law property settlement.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
