Family law is complex, and its complexity adds to the countless myths surrounding the topic.
These myths can add yet more stress and confusion to what is already an emotional time – so it’s important to set the record straight.
And who better to bust five of the biggest family law myths than the expert family law team at BGM Family Lawyers?
Myth 1: When a couple separates, each person automatically gets half the assets
Belinda Chitts, a family lawyer at BGM, says there is no 50/50 rule when it comes to dividing assets, regardless of how long the relationship lasted.
“Nobody has an automatic entitlement, unless you’ve entered into a binding financial agreement specifying how your assets will be split should the relationship fail,” she says.
“That’s because every relationship is unique. So everything depends on the specific facts and circumstances of your case.”
How do the courts work out what each party should receive in a separation?
“There’s a five-step process,” Belinda says.
- The court considers if it’s ‘just and equitable’ for it to intervene. This means that a Judge looks at whether the division of assets would be fair should both parties walk away with what they currently legally own.
- If it isn’t, the court identifies and values all the assets held by the couple – including property and superannuation.
- The third step is to assess each parties’ contribution to the relationship’s asset pool. Contributions aren’t just financial. So running a household or caring for children can carry as much weight as bringing home a paycheque.
- The court then looks at the future needs of both parties, such as:
- Whether there are children from the relationship – and how care will be split
- The age, physical health and mental health of each party
- The financial resources of each party including future income-earning capabilities (particularly any disparity between the two incomes)
- If the essential commitments (such as caring responsibilities) of either party burden them financially
- If there have been any instances of family and/or domestic violence in the relationship
5. The final stage is for the courts to consider whether the proposed division of assets is just and equitable, given all of the above.
Myth 2: You need to be living together for six months to be a de facto couple
In Australia, you have much the same rights as a married couple if you’re in a de facto relationship (when it comes to the division of property and maintenance following separation).
But is it true you only need to live together for six months to be considered a de facto couple?
Olivia Jennar-Bryant, senior family lawyer, says the Family Law Act defines a de facto relationship as one between two people who’ve been living together on a ‘genuine domestic basis’. So you can have a de facto relationship much earlier than 6 months.
But for a financial claim to be made in respect of that relationship, it has to carry on for at least two years.
“However, if you have children together, or if you make substantial contributions which it would be unfair to ignore (such as putting money into a property together), that two-year rule goes out the window,” she says.
“It’s also theoretically possible for you to be considered as being in a de facto relationship, even if you don’t live together with your other half permanently.”
In those circumstances, the court will look at other factors such as:
- The extent and nature of shared residence
- Whether a sexual relationship existed
- How intermingled the couple’s finances were
- Whether the parties were ‘public’ about their relationship
- How mutually committed the couple were to a ‘shared life’
Myth 3: You can keep an asset by transferring it to a friend or family member
Rebecca Gee, senior family lawyer, says not only is this myth false – but taking steps like this in an attempt to ‘defeat’ a property settlement claim could have negative consequences.
“If you transfer an asset, it isn’t automatically excluded from the asset pool,” she says.
“Rather, the court will do one of two things. It could reverse the transfer so ownership of the asset comes back to you. Alternatively, the court will regard the asset as yours – even though it’s held in the name of a family member or friend.
“Either way, it makes no difference to the property pool,” Rebecca confirms.
“However, it’s likely your actions would impact your case, as the court could take your negative conduct into account when it is determining the final property and/or financial settlement.”
So, if you need to transfer property, particularly post-separation – only do this with the consent of the other party.
Myth 4: Future inheritances can be divided in property settlement
“In property settlements, the focus is on property owned by each couple,” Dan Bottrell, BGM Family Lawyers’s director says.
“But an inheritance which you haven’t received is not yet your ‘property’. So it can’t be divided,” he says.
“Imagine, you are listed as a beneficiary in a relative’s will. If that relative has the capacity to change the terms of their will, your inheritance isn’t a given. Therefore, it will likely be ignored in any property settlement.
“Where it gets more complicated is when your relative loses their capacity to change their will. Now, your inheritance becomes inevitable so the court could take it into account,”
“In that instance, the court might adjust the existing property pool in a different way. For example, your partner could receive an increased share of the pool – excluding the inheritance – to take into account that you have an inheritance coming your way.”
Any adjustment will depend on the size of the inheritance and its ratio to the relationship property pool.
What about inheritances actually received?
Dan says the focus is then on the contributions made by either party to the receipt of the inheritance. For example, caring for the relative when they were sick.
“Often an inheritance is a true ‘windfall’ – so no one, let alone the unrelated party, has made any contribution,” he says.
“If both parties have contributed to the receipt of the inheritance, it could be shared between them – though not necessarily equally. However, if no contribution can be shown – the receiving party will be assessed as having contributed the inheritance. So the overall property settlement will be adjusted to reflect that unmatched contribution.”
Myth 5: You can stop working to avoid child support
Sometimes, a parent gives up work in an attempt to avoid paying child support. But, the objective of child support legislation is to make sure children are financially supported by their parents – in line with the capacity of those parents.
“So, if this happens, the Child Support Agency can assess them on their earning ability – not their actual income,” says senior family lawyer, Alice Drummond.
“This ensures children continue to receive the support they need, and parents continue to fulfil the responsibility to provide that support.”
What should someone do if they are facing this situation?
“You can apply to the Child Support Agency to change the assessment,” Dan says. “But only in three instances.”
These are when the paying parent:
- Is not working despite ample opportunity to do
- Has reduced their hours below full-time
- Has changed their occupation, industry or working pattern
The paying parent then needs to prove their self-imposed loss of income wasn’t motivated by a desire to affect the assessment of child support.
“If they can’t, the Registrar of Child Support has the power to assess them as if they were still earning income at their old level. The Registrar can then change the child support assessment accordingly,” Alice says.
Your Gold Coast Family Lawyers
Need to separate the myths from facts on your family law matter? Our team of Gold Coast Family Lawyers would be delighted to assist you with your legal matter:
Get in touch by emailing info.bgm@bgm.legal or calling 1300 246 529.
