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NSW Property Settlement After Separation - When is Balance of Asset Pool Determined?

Discussion in 'Family Law Forum' started by Needinghelp, 14 December 2014.

  1. Needinghelp

    Needinghelp Active Member

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    I am unfortunately at the start of a separation from my wife of 24 years with 2 kids and trying to get some certainty around all the uncertainty. I am still living in family home and starting discussions on property settlement with my ex.

    My question is around 'when is a line in the sand' drawn as far as financial assets. By that I mean is the value of our superannuation that will get split based on current value at time of agreement to separate or when the final property settlement is legalised (which could take months).

    Same applies to bank accounts. We have had one joint bank account for many years which is also our mortgage account. All bills paid from here and salaries go directly in there too.

    As we also take any money from here for living expenses we never really have our own money.
    Following the announcement of separation we obviously can no longer do it this way but my ex expects our salaries to still go onto the account and we both take out the same amount each month for ourselves for personal stuff. Remaining joint account will still get used for all family home mortgage, bills, food and kids stuff.

    In theory that is fine but I earn a lot more and feel I will be paying substantially more into mortgage every month than she does. Fine before but we are separated now and I believe that as long as we share the household bills during this interim period ( I am happy to pay above my share for fairness) then any additional money we should keep for our own account to pay for our own things.

    Surely as long as I am ensuring all the household bills are being paid including substantial school fees then any additional I earn I should be able to keep and do what I want with.
    These personal accounts should then not be taken into the property pool upon final settlement as 'post separation' earnings.

    I believe I am being more than fair by ensuring 60% of the monthly household costs are being paid (my ex pays 40%) so we are treading water during the interim period and before final settlement and we both keep the remainder of our salaries for own use but my ex wants all the bills paid and any extra I earn to reduce the mortgage.

    At what point is personal earnings following agreed separation date taken into account or am I just going to have to split every penny I earn even if when it is after we have separated?

    Hoping for some advice on where I stand ....
     
    #1 Needinghelp, 14 December 2014
    Last edited by a moderator: 13 July 2015
  2. Sarah J

    Sarah J Well-Known Member

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    Hi Needinghelp,

    There are many many threads in this LawAnswers Family Law Forum that talk about separation, divorce and financial and property settlement. I suggest doing a quick browse and reading through them.

    Generally, everything should be disclosed and form part of the "shared pool". This includes individual assets, individual bank accounts, individually inherited assets (e.g. under a will). As to how it is divided, the Family Court has a set of guidelines (which you will also find if you search through the treads on this website). The court will consider contributions (financial and non-financial) made by each partner before and during the relationship, children and child maintenance, relative earning capacities of each partner etc.

    Superannuation will generally not be considered. But double check with the court on that.
     
  3. Needinghelp

    Needinghelp Active Member

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    Thank You Sarah J,

    Appreciate you taking the time to respond.
    I have browsed around the site and understand the guidelines undertaken by the courts to split the asset pool for assets contributed before and during the relationship.
    What is not clear is if any new contributions obtained since the separation date are also part of the asset pool?

    Specifically any salary that is earnt like bonuses in the post separation phase or indeed super.
    That is not clear from all the info I have been reading.

    It is important to have own money that we both earn post separation to enable us to pay for own personal things including lawyers.
    However, if this money earned since separating (and now in our own personal accounts) is split at date of agreement then surely there is no incentive to save this and parties are better off spending it rather than waiting for it to be split at agreement time?

    Are there clear guidelines on whether assets obtained following separation (especially salary) is included as part of the final asset pool to be split?
    Or put another way, is the money earned after separation our own or will it end up being split anyway.

    Hope this is clear and you can provide an answer so no ugly surprises further down the track
     
  4. Sarah J

    Sarah J Well-Known Member

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    Post-separation earned assets can also form part of the shared pool. If referred to a court, they will consider whether this was earned as a result of the partnership (e.g. continuing business transactions where the business was built by both parties or money gained from assets sold). If it is independent income, the court will still consider it, but may not place much emphasis on it. The reason is, all income needs to be considered in the context.

    It is always more preferable to have a financial agreement as agreed to by the parties rather than one determined by court. If this is done and later the court considers it, the court will place greater emphasis on what the parties agree to, or have intended to agree to.
     
  5. Needinghelp

    Needinghelp Active Member

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    Whilst we were together we had a joint account and all money went into here.
    Now separated I have opened my own joint account and have my salary paid in here. I then transfer more than enough money to joint account to pay more than my share of bills.
    However she says her lawyer tells her that she has a right to see my personal account bank statement to see what money I am earning and where I am spending it on personal items.

    Is this true?

    I have nothing to hide but feel she does not have the right to see my personal account details.
    They also say I should still be paying my salary into joint account which I know is wrong.

    Thx for advice on this tricky area.
    At the moment it is preventing us moving forward on other property discussions
     
  6. Sarah J

    Sarah J Well-Known Member

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    As far as I know, there is no law that says you are obliged to disclose post-separation earnings, however, the custom is to disclose.

    This is because if the matter goes before a court, the court will need to look at post-separation income (wages, entitlements, benefits etc.) to assess the earning capacity of one partner compared to the other in order to ascertain what proportion of shared assets (e.g. child maintenance, mortgages or any other joint debts) that partner should be paying to best make a just and fair division. Further, assets earned whether directly or indirectly during the relationship can be diverted post-separation into separate bank accounts, therefore, all post-separation accounts and sources should be disclosed.

    Matters in pre-court negotiation should be dealt with in the same manner. Therefore, it is recommended that both parties be as candid as possible and disclose all individual and separate assets.

    You are correct in that you are entitled to pay salary into a separate bank account. You do not need to continue paying into the joint account.
     
  7. Needinghelp

    Needinghelp Active Member

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    Thanks for advise.

    I understand that individual post separation earnings known by both parties can be looked at to work out child support etc as you mentioned but are these earnings included in the asset pool and split or are they purely for working out earning capacity?

    I agree that anything earned before separation should be in the asset pool but after the agreed separation date (whether still living in same house or not) I dont see why this income should be part of the split.

    Am I right in this understanding?

    Thanks for your support and help
     
  8. Sarah J

    Sarah J Well-Known Member

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    They can be used in both ways depending on the source. They will most likely be looked at on a case by case basis.

    First (as part of the asset pool), to figure out if any of those earnings came about from sources existing during the relationship (e.g. shares bought during the relationship and distributed after the separation) or if funds post-separation are diverted from pre-separation sources (e.g. money in separate account during relationship used to purchase an income-earning asset such as a house after separation). Second (earning capacity), as the court tries and figures out a just and fair asset split, post separation earning capacity will be taken into account to figure out how much a person can afford to lose.

    Hope this clarifies things.
     
  9. Needinghelp

    Needinghelp Active Member

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    Thanks again.

    In our case we are purely talking about new individual salary earned since separating.
    As this goes into new personal bank accounts only opened since separating we are only talking about whether this balance is part of the pool or not.

    None of this money comes from before separation but need to understand if this gets split also
    If one party has earned 2 times more for instance after separation is it fair to split further down the track when settling.
     
  10. Sarah J

    Sarah J Well-Known Member

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    In this case, it is recommended you disclose post-separation income in good faith negotiations. At the end of the day, a financial agreement should be agreed privately between two parties and in accordance with what the two parties believe is fair and just. If neither parties wish to disclose post-separation income or if you agree on not disclosing, then that is perfectly fine. It really is on a case by case basis. If you cannot agree between yourselves, and the matter is referred to court for a financial order, then the court will decide whether this post-separation income should be disclosed or not and whether it will form part of the court's decision or not. The reasons outlined above are reasons why the court may order for the disclosure, but without good reason, the court will not need to look at post separation earnings.

    You will need to disclose financial statements from separation up until the date of the case assessment conference if the matter is referred to court.

    Have a look at the Family Law page on what to disclose: here.
     

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