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The Law & You: valuing your contribution during divorce

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It’s unfortunate that some women tend to undersell their worth.

A recent study using data from more than 5,000 Australians workers and employers found that only 17% of women surveyed had asked for a pay rise in 2018 compared to 23% of male workers surveyed.

The struggle some women face in asserting themselves financially happens outside the workplace too. Women who have traditionally had higher incomes than their spouses can also find themselves in a challenging situation.

Divorce proceedings can be another minefield where women often have to defend the contributions they have made during a marriage.

This article examines key questions around how to value a woman’s contributions during divorce.

Isn’t it the case that a divorce involves a 50/50 split?

We’ve all heard the famous myth that a divorce results in ‘losing half of everything’ to your ex-partner.

In Australia, this 50/50 split is very different from reality. Here, the process of dividing assets during separation involves the Courts comprehensively examining the contributions each partner has made to the relationship. 

How will the Courts consider finances?

In accordance with the provisions of the Family Law Act 1975 (Cth), the Court will examine what each spouse’s contributions have been to the relationship. These contributions are assessed in percentage terms, and can be both direct or indirect or financial and non-financial, including:

  1. The direct financial contribution each spouse has made to the assistance of the family or partnership, usually from earnings or other sources of income.
  2. The indirect financial contribution made by each spouse, such as money applied to groceries or utility bills which enable the other party to contribute to the house mortgage.
  3. The non-financial contribution to the welfare of the family or partnership made by each spouse through acts such as caring for children or maintaining the home.

The Court also examines each party’s future needs to determine whether or not their percentage should be adjusted, taking into account their health, their caring responsibilities going forward, and their earning capacity.

How do the Court’s make an actual assessment?

After considering these types of factors, the Courts assess how to divide assets and debts between the two spouses according to their contribution percentage, which can then be adjusted according to need.

While the process may seem overwhelming, it is reassuring that the Courts adopt a holistic approach when considering how family assets will be divided so that all contributions may be considered.

What is the best way to manage conflict over dividing assets?

Dividing up assets after a separation or during a divorce can be contentious and may lead to conflict, even prolonged conflict. It’s best to try to manage that conflict as quickly as possible so that both spouses can move on with their lives.

If you can’t do this between the two of you, engaging the services of a professional mediator can help manage discussions so they travel smoothly, particularly for spouses who want to resolve issues out of Court.

Debra Parker and her colleagues at Watts McCray Lawyers in Canberra can provide the highest quality expert advice and mediation services in order to best manage relationship breakdowns or conflicts.

Where conflict persists, it can be important to talk to dispute resolution service providers such as Relationships Australia.

More advice on locating Family Dispute Resolution Services can be found at familyrelationships.gov.au/separation/family-mediation-dispute-resolution.

Watts McCray is one of Australia’s largest firms of family and relationship lawyers.  We have many family law specialists on our team, backed by years of experience. Our lawyers have the skills to provide you with sound, practical advice about separation, property and financial matters, parenting arrangements after separation, child support, divorce and family violence matters.

Watts McCray also provides legal help if you want to resolve matters without having to go through Court. They help with negotiation, mediation, collaboration and arbitration services as well as the traditional Court litigation process. We also help with estate planning and Wills. Call them in Canberra on (02) 6257 6347 for more information and for tailored services to meet your legal needs. Situated on Level 7, Canberra House, on 40 Marcus Clarke Street in the city.

Watts McCray has recently been awarded with ‘Best Law Firm of the Year-Australia’ in the Lawyer’s International’s Legal 100, 2020 awards.

This editorial was created in partnership with Watts McCray. For more information on sponsored partnerships, click here

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