After the breakdown of a long-term relationship or marriage, dividing assets can be time-consuming and stressful. Quarrelling with an ex-partner over which party is entitled to each asset only serves to exacerbate the stress and drag out the process. For those in this uncomfortable situation, it is helpful to understand the family asset pool and how it may be divided up.

It is not unusual for one party in the relationship to take sole or nearly full control of the finances, taking responsibility for paying bills and managing the bank accounts. Although the other party may be content with this arrangement while together, it can leave them at a distinct disadvantage in agreeing a financial settlement. As attorney-at-law Edgar Paltzer knows from years of experience, the resolution of the dispute is far more straightforward when each party has adequate knowledge of the legal process.

The family asset pool is defined as the value of all assets owned by the involved parties (both shared and individual), acquired during, before and after the course of the relationship.  This includes but is not limited to property, vehicles, businesses and financial investments.

The Legal Approach to Dividing the Pool

If an agreement cannot be reached between the two sides and it has to be negotiated by law in court, there are different ways to approach the sharing of assets: the global method, where the court groups all assets into one main pool before division, or assessing them on an asset-by-asset basis.

The latter approach may be appropriate when the court judges post-separation success to be founded on support and the refining of skills throughout the relationship. Equally, the court may decide that the only asset that should be assessed is the matrimonial home. The court may also use its discretion to add any large inheritances to the asset pool or separate them from the rest of the assets.

The embedded PDF looks at alternative options to court proceedings.

To enable the process to be conducted as smoothly as possible, both parties are required to make full disclosure of their financial situation. This will include bank and loan statements and tax returns, as well as company assets.

Debts and Liabilities

Debts and liabilities also have a bearing on the division of the asset pool. Mortgages, outstanding loans, and credit card debts need to be identified and assessed by the court. Regardless of whether the debt was taken out in an individual’s name, the court may find that both parties benefitted from it and therefore decide to deduct the debt from the main pool.

Pensions and Superannuation

Pensions may be also be added to the pool or separated for individual assessment. A pension awarded on a monthly basis may be treated separately to the main asset pool, due to an inability to convert it into a lump sum. Equally, a spouse’s pension can be viewed as the result of years of support from the other party who may have taken a career break to raise children, allowing the spouse to concentrate on furthering their career. The court may therefore analyse pensions individually rather than adding them to the main asset pool.

Independent Valuations and Moving Forward

While it may be straightforward to value some assets, parties may disagree on the value of other assets. Property and vehicles may have increased or decreased in value since their purchase and it is essential to provide an accurate, up-to-date estimate of their worth. When there is dispute over the value, a third party should be appointed to independently supply a current estimate.

After all assets have been assessed, the court can begin the process of dividing the pool. For those who feel overwhelmed and unsure where to begin, it is advisable to consult a lawyer for legal advice on how to proceed.