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Family Law - Property Settlements - The Four Step Process

Date: October 21, 2011

Authors: Angelita Manlangit LL.B.

Decisions associated with property settlement can be complicated and exhausting. To guide the parties who undergo property settlement, there are four steps process to follow.

The creation of Net Asset Pool

In this process, all assets and liabilities of the parties must be identified. These assets are those acquired before or during the marriage or after the separation. Assets are those things own by both parties that have value such as cars, real estate, furniture, shares, jewellery and effects. Liabilities refers to debts, loans, mortgages etc.

The Court will also consider other financial affairs of both parties such as funds or assets over which they both have influence or control.

Once all necessary assets and liabilities have been identified the net asset pool will be calculated. The net asset pool is calculated using this formula,

            Total Assets – Total Liabilities = Net Asset Pool

The net asset pool figure will then be divided between the parties based on their circumstances. It is the role of LAC Family Lawyers to skilfully argue your case and get you the best result.

The contributions of both parties

Evaluation of each parties contribution to the marriage is the next step of property settlement. This includes both financial and non-financial assessment and contribution made as a homemaker or a parent.

The Court will look at how each party contributed to the relationship. These contributions have four specific groups:

  • Financial Contributions – These are monetary contributions of both parties in the relationship. It can include but not limited to: wages, the amount of each party at the start of the relationship, termination money and lottery winnings
  • Parenting Contributions – These contributions do not specify a certain amount. The contribution can be outlined as the amount of parenting that was done. Example of these are, taking them to school, helping them with their homework, spending time with them etc.
  • Homemaker Contributions – These contributions are similar to parenting contirbutions. These are made at home like cooking, cleaning, washing, etc.
  • Non-financial Contributions – These contributions include “value adding contribution”. This value is dependent to the market rate of paying another person to complete a task. Example of these contribution is renovating the parties' house.
Determining future needs

There are factors that needs assess to determine the future needs of both parties. The Court will look at a range of factors such as:

  • Age
  • Health and its state
  • Income, property and financial resources
  • Physical and mental capacity to obtain a job
  • Parent or sole carer under the age of 18
  • Commitments that are essential to support themselves or a child
  • Responsibilities of either party to support another individual
  • Both parties are living a reasonable standard of living
  • Duration of marriage
  • The need to protect a party
  • The maintenance of the property that affected the earning ability of a party

Once the applicable needs of each party has been declared and identified, the Court will then evaluate at the cost of these needs.

The Practical Effect: Just and Equitable

This is the final step where the Court take all factors into account and determine if the proposed settlement is just and equitable in all circumstances. Upon reaching a mutual agreement between two parties about property settlement, there are two ways of formalising the agreement: (1) Consent orders, and (2) Financial Agreement.

Keep in mind, when applying for property settlement, both parties has the accountability to make a full and detailed disclosure of their respective financial condition. It is advisable to take legal advice to ensure that all issues are taken into account.

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