What happens in a property division if you or your partner earns a higher income? What are "special skills or contributions" and how are they valued in a relationship breakdown?
Often in relationships, one partner will earn a significantly higher income than the other, or will have built up a sizeable investment portfolio due to their financial acumen. Sometimes this is referred to as that partner having special or extraordinary skills or contributions, which can lead to that partner offering greater financial contributions within a relationship.
When it comes to dividing up assets following a separation, these special skills are often raised as contribution factors towards the relationship, in an endeavour to increase the division of assets to that particular partner.
In any property division, it is not simply financial contributions that are important to consider. The non-financial contributions of each partner must also be taken into account in a property division.
It may be the case that, while one partner is engaged in high income employment, the other partner spends a large proportion of their time maintaining the home and caring for the children. This division of family responsibilities enables the partner earning a higher income the freedom to pursue more demanding career opportunities, which may necessitate, for example long working hours or extensive travel.
Additionally, where a partner has sacrificed their own career in order to care for the family and support the higher income earner, this will generally be factored into a settlement by way of an adjustment in that partner's favour. This takes into account their lower earning capacity and ongoing parental care responsibilities as part of the separation.
How are these assets divided in a settlement?
Any property settlement needs to take into account both financial and non-financial contributions made by each partner. Property settlements must also take into account the future situation of each partner following the resolution of the matter, and ultimate division of assets.
Overall, the settlement reached needs to be one that meets the legal terminology of being "just and equitable". This means that there is no 'one size fits all' in family law, and that the settlement reached is usually based upon the circumstances of each individual case.
For more information on property and finance following a separation, refer to the Family Court of Australia.
How can Sharrock Pitman Legal assist me?
Should you like to know more about how your contributions will be taken into account in a property division, our accredited specialist family law team would be pleased to assist you. Feel free to contact them on 1300 205 506 or via email at firstname.lastname@example.org.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
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Katharine is a Senior Associate of Sharrock Pitman Legal.
She is an Accredited Specialist in Family Law (accredited by the Law Institute of Victoria). For further information, contact Katharine on (03) 8561 3319.