Family & Relationships

Everyone's an Expert

One of the interesting things about practicing in family law is that it covers so many different academic fields such as social science, psychology, politics (both party politics and political theory), alternative dispute resolution, the economy, business and commerce, education, child welfare and development, mental health, prevention of domestic violence and many many more.

In addition, unlike some other areas of law, the outcome can’t be determined from strict, defined rules that are laid out in black and white but instead involves making subjective assessments and carefully weighing up competing factors and the overall circumstances.

Family law, when decided by a judge, is probably the most discretionary area of law because the complexity of peoples’ lives means they can’t always be pigeon-holed into nice neat boxes.

The two usual questions ultimately to be decided in family law aren’t narrow or technical enquiries but instead:

1.   1. What’s in the “best interests” of children?; and

2.  2. How should assets be divided in a way that’s “just and equitable” i.e. fair?

For all these reasons, most people already have an opinion about aspects of family law, for example, the rights of fathers or whether pre-nups are a good thing. However, although this makes for interesting, lively debate, in reality most people aren’t experts and it can lead to some assumptions about the law that are wrong.

In the division of assets in property disputes, one misunderstanding I sometimes hear is that “every case is decided 50/50.” However, there is no presumption of an equal division or any other percentage split. Each case is decided on it’s own facts, subject only to broad guidelines outlined in the Family Law Act, known as the four-step process.

In summary these are, firstly to identify and value the assets and liabilities owned by both parties; secondly to assess the parties’ respective contributions (financial, non-financial and homemaker/parenting); thirdly to assess the parties’ current and future financial “needs”; and finally to consider the overall impact of the steps 1-3 to determine what is “just and equitable” in the final division of assets.

Another similar thing I hear is that “I automatically keep whatever I had at the start of the relationship”. In fact all assets at the date of a hearing are included in the “pool” and are, potentially, available for transfer to the other party. There’s no concept of quarantining assets. In reality, certain assets (like those owned at the start or inheritances from a parent) may get treated differently but that becomes a question of weight at step 2, (“contributions”), relative to all the other considerations.

It’s also not possible to exclude any asset that may be owned under the guise of a trust or company. The Family Court will always look at the underlying reality of a situation and isn’t bound by legal loopholes.

Another common assertion is “We don’t have any equity in anything so we don’t need a property settlement.” However, it’s important to get a properly documented property settlement because it’s the only way you can be absolutely sure that your former partner can’t claim against you in the future, potentially years ahead, by which you may have accrued significant assets. A formal agreement is often also needed to obtain stamp duty and capital gains tax relief arising from any transfer of assets between spouses.

Most people are aware that de-facto couples are now treated like husband and wife in family law disputes but some are occasionally surprised learn their belief that We didn’t live together for two years so there is no ‘defacto relationship” isn’t correct. In reality, de-facto couples can be entitled to bring a claim based on other factors including significant financial contributions or if you have a child together. In some more unusual cases, the court has found that a de-facto relationship existed even where the parties didn’t cohabit.

Pre-nup agreements aren’t binding in Australia” is a fairly frequent misunderstanding. In fact, married and defacto couples can enter valid and binding ‘Binding Financial Agreements’ before and during their relationships.

In relation to children, there is a common belief that “the kids always live with mum.” In practice, children often do live primarily with their mothers, but not necessarily and there’s certainly no formal preference towards mothers in the legislation. Rather, the court will consider (amongst many other factors) which parent has been meeting the child’s primary needs, whether that happens to be mum or dad.

There is sometimes also an assumption that “When my child turns 13 years he/she will be able to live with whichever parent they choose.” In practice that might be the outcome but children’s wishes are never automatically binding (at any age) and will depend on all the other criteria that makes up their “best interests”.

In summary, there are no hard and fast rules in family law but only broad guidelines, some of which aren’t universally understood. It’s important to obtain proper legal advice to avoid acting (or not acting) based on what may be a false assumption.