The shocking truth about financial settlements today
Once upon a time, primary carers who were traditionally stay at home mothers walked away from the asset pool with 80-85%. However, today, if the asset split offers 60-70% to the non-working or limited earning capacity primary carer this is considered good and fair.
A couple with a modest asset pool of $300,000 would mean that the primary carer with limited working capacity and majority of time with the children would walk away with $180,000, compared to the parent without the primary care responsibilities receives $120,000. Many people would struggle to see this as fair and equitable….
So, in light of the escalating costs to ‘fight’ for more money, here are a few tips to consider when negotiating your financial settlement:
- Take the offer if you can live comfortably on the settlement money. You may end up spending more money on fighting the settlement and investing in legal fees than you would gain from taking a fair settlement.
- Ensure that all superannuation accounts for each individual are included in the asset list
- Go through the bank statements of your spouse and the joint accounts and look for any money being transferred to an account you don’t know about. It may be a trust account and this needs to be included into the settlement as a further asset
- Remember that circumstances change for the better and for the worse. Be as informed and as calculated as possible. Ensure that bonuses are included and ask for unnecessary debt created post-separation to be excluded from the balance sheet
- Never mix child support or child maintenance into the financial settlement. Child support and child maintenance (refer to the Divorce Answered Binding Child Support Agreement) are entitlements for the children and there is federal law supporting the ongoing support of minors
- Consider the earning potential for either spouse to make the money again
- Do you have any extenuating circumstances that might be a significant factor in awarding you a greater percentage of the asset pool? If so, your lawyer needs to know about this
- Listen to your lawyer. Your lawyer has a lot of experience in financial settlements and knows what likelihood you will have in the split. If your lawyer is uncertain, consult with a barrister for the hard-hitting, realistic advice
There are a few forms and tools that you can use to help you with the financial split. You might like to have these forms filled out before meeting with your lawyer. They are:
- Divorce Answered Budget Tool. Knowing where you stand financially and what income you require to sustain your life, home and family is a necessary part of the financial settlement. You can use the Budget Tool today for Free.
- Financial Statement. This form is a declaration of your income and outgoings to the court and to your ex-spouse. If you are seeking a financial settlement and ensuing court order, this form will be lodged at court. You can find the form at the Family Court website under “Forms and Fees” then under the “financial” tab.
- Balance Sheet. This sheet outlines what assets and liabilities you have and what you believe your ex-spouse has and ultimately assists in balancing the asset split. Again, you can find the form at the Family Court website under “Forms and Fees” then under the “financial” tab.
If you aren’t sure what you want from your separation settlement, take some time to review your budget, fill out the forms as suggested above and from there you can try to work out a fair and equitable asset split. If you know what you are offering is fair and just to both you and your ex-spouse, then stand firm and explain your position. Equally, remember to be very open to the recommendations of your legal team.