The first step is to crystallise the parties asset pool which involves collating the individual assets owned by both parties and attributing values to those assets. The assets to be crystallised may involve property, shares, respective superannuation entitlements, cash at bank, business interests, various other investments, motor vehicles and any other items of significant value. It is imperative to also recognise any liabilities encumbering the asset pool including mortgages, credit card debts, personal debts, loans etc. Both parties are legally obligated to provide full and frank financial disclosure.
The second step involves assessing the parties contributions to the asset pool. Contributions may be assessed as financial and non financial contributions. Indeed in some circumstances, one party may have worked throughout the course of the relationship whilst one party worked less or not at all. One party may have been the primary homemaker and parent whilst the other party had to travel frequently due to work commitments. Both parties may have worked full time with one party earning significantly more than the other. One party may have owned assets at the beginning of the relationship (initial contributions) whilst the other party had nominal savings. These factors may not necessarily result in uneven contributions by both parties. Conversely, if, for example, one party made an extraneous contribution such as contributing a sizeable inheritance or redundancy payment to the relationship which was applied towards a mortgage or otherwise, an uneven assessment as to the parties contributions may be made. This step involves carefully detailing and canvassing the duration of the relationship, the parties employment histories, how and when assets and liabilities were accumulated and other relevant matters.
The third step is to consider the parties respective future needs such as the parties ages, health, earning capacities and care of children under the age of 18.
The fourth step involves comprehensively assessing the parties relationship and determining a settlement that is just and equitable in all of the circumstances.
It is important that each person’s circumstances are assessed individually utilising a tailored approach to ensure that each relevant factor is considered before an overall assessment is made so that settlement discussions and negotiations can take place.