There are many myths surrounding family law matters. These can lead people to develop unrealistic expectations about the process. Misunderstandings around property settlements can cause confusion about your entitlements. One common misconception is the place of pre-marital separate property.
What happens to property owned before marriage in Australia?
Generally, property owned before the marriage is considered an initial contribution by the party who brought it into the relationship. However, it doesn’t automatically remain separate. The Family Court considers all assets and contributions (financial and non-financial) when determining a fair property settlement. The significance of pre-marital assets can diminish over time, particularly in longer relationships where assets have been intermingled and joint contributions have been made. Let’s clear up this myth once and for all.
Key takeaways
Not all property is considered in the same way under family law.
The court’s four-step process will include pre-marital assets.
The length of a relationship can affect how premarital assets are approached when dividing property.
Longer-term relationships reduce the importance of initial contributions.
Longer relationships tend to possess more jointly owned property assets.
Pre-marital property in family law financial orders
A family law property settlement includes the assets and liabilities of both parties to a marriage. The Family Law Act has a comprehensive definition of property owned. Premarital assets are property acquired before marriage. It’s considered separate property rather than marital property in Australian family law.
Some parties believe that property settlements are restricted to marital assets. However, this isn’t the case. Premarital property is considered in a property division. Pre-marital financial resources are handled on a case-by-case basis.
Four-step test
Pre-marital property is included in the Court’s four-step test:
The Court values the asset pool. This includes salary earnings, real estate, and other property division.
Each party’s financial and non-financial contributions are weighed.
The Court determines a party’s future needs, such as spousal maintenance.
The Court decides if the settlement is just and equitable.
Relationship length
The length of a marriage or de facto relationship can have a major effect when deciding property settlement cases. Assets such as a house bought or money are direct financial contributions to the asset pool. If the relationship was relatively short, these initial contributions can be significant. This is because a former partner will have had less opportunity to contribute to those assets.
In long-term relationships, pre-marital assets become less relevant. For example, let’s consider a house owned by a spouse that’s brought into the marriage. Over the years, both spouses will contribute to the house’s maintenance and renovation work.
One partner may make non-financial contributions. They could sacrifice a career to raise the children and attend to family duties. This increases the other party’s contribution to the pre-marital asset and also their claim to it in a financial settlement.
Percentage of the property pool
In a shorter relationship, initial contributions make up a greater proportion of assets in the relationship. Over the course of a long relationship, couples will naturally accumulate more and more jointly owned assets.
Assets purchased after marriage may become a higher percentage of the marital pool. Initial contributions will then be less consequential to the family court.
What our clients say
Peter Andrews was so helpful resolving an odd property dispute with an ex partner. He listened without judgement and acted quickly to resolve the matter, I honestly could not have coped without him, an absolute godsend!! Thank you Peter!
- Lauren Myslinski
When you’re having property divided, it’s crucial to have access to professional legal counsel. We ensure that you are fully aware of your rights regarding a property settlement. If you brought few premarital assets to the married change, that doesn’t mean you don’t have an entitlement.
We will work with you to fully account things for your contributions, such as sharing in household expenses. If you’re facing difficulties, we can help you through dispute resolution with the other partner. You can come to your own agreement that benefits all parties involved.
Conclusion
Pre-marital property brought into a marriage is considered a contribution. This can influence the outcome of a settlement. Understanding your rights regarding these assets will help you secure an equitable distribution. Shorter relationships increase the importance of initial contributions.
There is a time limit to claim pre-marital assets, so it is important to be aware of the relevant statutes of limitations. Longer relationships generally make marital pool contributions and jointly owned assets more relevant.
Need legal advice from a qualified family lawyer?
If you’re looking for a family lawyer to assist with a property settlement or any other family law matter, we can help. Our team is just a phone call away.
