Tips on what’s included in the property pool
If you are separating from your spouse or partner and either of you have come or are coming into an inheritance since separation, then it may be included in the property pool to be divided between you. The same principle may also apply to other property acquired following separation.
The case of Calvin & McTier [2017] FamCAFC 125 considered whether property (specifically an inheritance) acquired some time after the parties had separated was to be included in the property pool for division between the parties.
How is property divided in a family law matter?
To understand the reasons a Court may include the property that you acquired or inherited after your marriage separation in the pool, it is necessary to first understand how property is divided in a family law matter.
Briefly, the Court considers the following four matters and then decides on a percentage split between the parties:
- The net property pool of the parties;
- Initial contributions of the parties and their contributions during the relationship (financial, non-financial and as parents and homemakers);
- The parties’ future needs (by, for example, taking into account their health, age, who has care of the children, their future earning capacity etc.); and
- Whether it would be just and equitable to make orders altering the parties’ interests in the property.
What happened in Calvin v McTier for the inheritance to be included?
In this case, the husband came into an inheritance 4 years after the parties had separated. By the time of the trial at Court there was approximately $400,000 left from that inheritance.
The wife sought to include what was left (and not the whole amount) in the property pool for division between them; the husband argued against this.
At trial, the Magistrate considered that the inheritance should be included in the property pool and treated it as a contribution by the husband. After he considered the above 4 matters (including the inheritance), the magistrate decided the property split was 65/35 in favour of the husband (it was 75/25 without the inheritance in the husband’s favour).
The husband appealed this decision, arguing the inheritance should not have been included.
The Appeal Court dismissed his appeal on the basis that all property owned by the parties can be included in the pool for division. It said that “the court retains a discretion as to how to approach the treatment of after-acquired property. The trial magistrate could have included the inheritance amongst the property to be divided or dealt with it separately. The trial magistrate was not obliged to follow one course or the other”.
MDL can assist with post-separation matters
Separations are daunting and, as shown by this case, they may impact other facets of your personal and business dealings, including your wills and estates matters.
That’s why we recommend you consult with a solicitor so that they can assess whether you require assistance in this regard and thereby assist in protecting you and making the process as simple as possible.
McCarthy Durie Lawyers can assist you to draft a cohabitation agreement and talk you through the advantages and disadvantages of the agreement’s effect on you.
Contact the Family Law team at McCarthy Durie Lawyers on 07 3370 5100 or fill out the contact form here.
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