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After separation – can you keep your income safe from your Ex?

By June 21, 2016No Comments

By Cristina Huesch

After people separate these days, there can be a long delay between separation and when a court makes final orders. Unless parties seek legal advice early, and get their matter over and done with, the long court delays can impact parties in a way they didn’t necessarily foresee. Some people’s financial circumstances change massively between the date of separation and final orders: they may incur a lot of debts, they may waste money eg on holidays or gambling, or they may earn good money and squirrel it away.

So, are your hard-earned dollars safe after separation? Do you have to share your savings long after separation?

A recent court decision had a look at this situation. In Trask & Westlake (a 2015 case), the parties separated 4 years ago. After separation, the Husband started to earn really good money. The first judge decided that the Wife should receive 60% of their asset pool (she had 4 kids to look after). A complicated formula was used to work out how to divide the assets including sale proceeds of a house. The house sold for a very different price than estimated, and this had an effect on how much money the parties each walked away with.

The Husband appealed those final orders which he said were unfair to him. He argued that his post-separation direct financial contributions towards the asset pool should have been taken into account more.

The appeals court disagreed. They said that whilst he went on working and putting his money towards the assets, the Wife went on doing what she had done during the 11 year marriage (ie looking after the kids and being a Mum). These efforts were seen as equally valuable. He didn’t get any extra credit for earning  a lot more after separation. The court found there was nothing wrong with the 60:40 division of assets, although the trial judge made some errors in drafting the orders as the formula used gave an unfair outcome (There was a difference between the estimated sale price of the property and the actual sale price later on. This impacted the actual formula used by the judge when drafting orders in a way which prejudiced the husband).

What are some of the key insights from that case? If you are a high earning person, it will be in your interests to finalise your property settlement as quickly as possible. That way, you can move on with your life not only emotionally, but also financially. If you are a home-maker or parent primarily, it may be in your interests to focus on carrying out your role, so that your contributions are ongoing well after separation and match any direct financial contributions by your Ex. Where appropriate, you may be advised to seek interim spouse maintenance to keep things ‘ticking over’ until your delayed final orders are made.

Because of extremely long court delays (2-4 years now for final hearings), Alliance Family Law may advise you to consider other settlement processes (whether you are the ‘breadwinner’ or the ‘homemaker’). These can be like court procedures (eg arbitration, where the parties pay a family law barrister to act sort of as a private judge, and make a legally binding ‘Award’), or negotiation processes (negotiation, mediation, arbitration, collaborative practice) or simply help clients with information sufficient to do a deal at the kitchen table, which is then recorded by way of Consent Orders.

Come and see Alliance Family Law for a frank and honest discussion of your needs – your first appointment is free!

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