When a relationship ends, the splitting of assets between the couple is usually one of the hardest and most draining aspects of the breakup. One of a range of potential methods is a so-called “70/30 split.” But what does it actually signify, and how does it play out under Australian law?
The 70/30 Split in Divorce Settlements: An Example
70/30 split in divorce refers to a phrase applied to categorise the distribution of 70% of matrimonial assets to one party and 30% to the other. Such division is sure to apply in scenarios where there exists a wide disparity between the parties’ economic contribution, future earning abilities, or needs.
But one has to keep in mind that there is no such “one-size-fits-all” rule that can be followed in Australian divorces’ property settlement. It is determined case by case, and whether a 70/30 division is equitable or not would be based on legal and case-related factors. The Family Law Act 1975 directs it, and it ensures the property splits to be necessarily “just and equitable” to both parties.
How Australian Courts Determine Property Settlement
Under Australia’s laws, property settlements endeavour to be reasonable by looking at the overall financial situation of each spouse.
Firstly, the court requests a rough outline of assets, liabilities, and financial resources of the union, or the “property pool.” The property pool comprises all from realty and bank balances to super and personal belongings.
With the property pool in tow, the court proceeds stepwise:
Identify Contributions: The judges consider what each of the spouses brought to the marriage. This may be money, e.g., investments and income, or in-kind, e.g., household work or childcare.
Assess Future Needs: Everything that will impact a future spouse is taken into account by the court, including his or her age, health, earning ability, and potential to be economically self-sufficient. It is particularly necessary in cases where one of the spouses can remain financially dependent after the divorce.
Reach Fairness: Finally, the court looks at the division in terms of fairness. This involves levelling any disparity in contribution or need so that there is no unfair hardship to both spouses.
Factors Affecting a 70/30 Apportionment of Property
There are various reasons why there is unbalanced distribution of property, like the 70/30 ratio discussed here. One of them is a highly significant economic contribution on the part of one of the spouses. For instance, if one brought in an enormous amount of property to the marriage or was the only one who invested, he or she could be worthy of more from the pool of property.
Future needs are also of essential importance. Where a spouse is of lower earning capacity by virtue of age, sickness, or time out of the labour force because they have stayed home to bring up children, the court can allow them less property but compensate with other factors, e.g., spouse maintenance.
Child custody can also be an important factor. The spouse who will be assuming most of the responsibility for the kids may require more of the property so they are able to have suitable housing and stability.
Conclusion on 70/30 Property Settlements
An equitable and fair division of assets is achieved through a balancing act of contribution, future requirement, and the actual situation of both spouses. Even a 70/30 is excessive, but one intended to be symbolic of fairness, not equality.
Knowing how courts decide and talking to lawyers such as Marsden’s Law Group, divorcing couples can approach the settlement process with clarity and confidence.
If you are going through a property settlement or wish to gain further information on the process, seek the advice of a qualified family solicitor to discover more about your obligations and entitlements.
