Post Separation Contributions
26 February 2024 · Read time: 4 minutes
Post Separation contributions refers to changes in a couple's joint assets, that are made between when separation took place, and when the property settlement is concluded.
For example, if a couple separated and then - before concluding their matter (eg via Consent Orders) - one party purchased a property, then that new property may be considered as having been contributed to the join asset pool that is to be divided.
What are Post Separation contributions?
One of the first steps in a separation matter is to evaluate the contributions made by each party to the asset pool.
These contributions encompass financial, non-financial, and those towards the family's welfare.
Contributions can be categorised as follows:
- Initial Contributions: These pertain to what each party brought into the relationship at its inception.
- Contributions during the Relationship: These include efforts made by both parties throughout the course of their relationship.
- Post-Separation Contributions: This refers to contributions made from the date of separation until the present (or until the matter is heard in Court).
How does Family Law view post-separation contributions?
Even following separation, it's not unusual for parties to maintain some degree of financial entanglement, such as shared property or joint accounts.
A prevalent misunderstanding is that the Court will automatically exclude any assets obtained after the relationship's end from the property pool, or that any increase in value post-separation should be ring-fenced.
When considering the acquisition of property or assets post-relationship, a critical factor is the manner in which the asset was acquired.
If a party acquires property after separation, but the acquisition is directly linked to a joint bank account, it should clearly be regarded as part of the asset pool. Conversely, if a property is purchased by a party using funds entirely separate from the relationship (for instance, through a lottery win), it might not be treated as a direct contribution and assessed differently.
The Court is obligated to evaluate all contributions made by the parties; however, the significance attributed to a post-separation contribution can vary.
Post-separation Non-Financial Contributions
While financial contributions may be the most straightforward form of contribution to assess, as discussed earlier, they are not the sole type of contribution a party can offer after separation.
If one party predominantly provides homemaking contributions after separation, this must be taken into account and weighed against the financial contributions of the primary breadwinner.
Post contribution considerations
To recap, when looking at contributions made after separation, it's important to look at the following:
- What was the length of the relationship and the duration of the separation?
- Are there children from the relationship, and who bears primary responsibility for them?
- How were the assets acquired post-separation? For instance, were they derived from pre-separation assets or other resources?
- Did the other party indirectly contribute to the acquisition of the asset?
What about When Asset Values Change Post Separation?
Adjacent to post separation contributions, it can happen that the value of an asset changes after separation.
Some examples of this could include:
- Increase or decrease in property value
- Increase or decrease in stocks or investments
- Accumulation of savings by one party from their employment income;
- Market fluctuations
- Superannuation increasing over time
- A property or business being ineffectively managed
Post-separation contributions can also manifest in:
- Assuming sole and/or primary care or guardianship of the children from the marriage;
- Financial contributions, or the lack thereof, towards the upkeep of these children.
How are Post Separation assets treated?
Determining the significance of post-separation contributions poses a challenging question for the courts and often becomes a contentious matter among the involved parties. This complexity intensifies, especially when comparing the financial contributions of one party with the homemaking and parenting contributions of the other party.
Global Approach to dividing assets
Assets acquired post-separation are not ‘quarantined’ or removed from the matrimonial asset pool – rather, there is an assessment of each of the parties’ contributions to those assets.
Asset by asset approach
In some cases, the courts will adopt an asset-by-asset approach to assess each party’s contribution to a particular asset.
Conclusion
Assessing contributions involves a degree of discretion, relying on judicial judgement rather than a rigid accounting procedure. The ultimate guiding principle for the Court in property settlement matters is to achieve a just and equitable outcome for all parties concerned.
It's evident that post-separation contributions can introduce complexity into your case. The longer the duration between separation and the final property settlement, the higher the potential for ambiguity.
This is another reason to try and resolve your matter quickly.
If you require assistance with your separation, don't hesitate to reach out to Movement Legal. We're here to help.
