Valuing the Asset Pool in Family Law Matters

Sometimes clients are surprised when I explain that in family law property matters we identify and value the asset pool at the current time. A common misconception I hear from people is that they believe the asset pool at the time of separation is what will be valued and considered and that assets acquired post-separation are automatically excluded from the available asset pool (incorrect). One of the reasons we consider the asset pool at present is because contributions continue post-separation. 

The case of

exemplifies the significance of ongoing post-separation non-financial contributions such as caring for children. This case involved a significant increase in the husband's wealth post-separation. The parties had been separated ten years prior to property settlement proceedings, over that period the asset pool grew up to five times its value due to the appreciating value of assets and the husband acquiring more property. At first instance the Trial Judge gave significant weight to the husband’s post-separation contributions and assessed contributions as 70/30 in favour of the husband, with a 10% future needs adjustment in favour of the wife. On appeal the Full Court considered the wife's non-financial contributions during the marriage and post-separation, which enabled the husband to build his career and wealth post-separation, to have been undervalued. At [63] the Full Court said "The parties agreed that, up to separation, their contributions had been equal. What then had changed between separation and trial sufficient to warrant the Federal Magistrate’s conclusion that the husband’s post-separation contributions should be assessed at 70 per cent and those of the wife at 30 per cent? It seems that the issue operating on his Honour’s mind was the husband’s use of his very considerable earning capacity to support the family and to acquire assets after separation. For the wife’s part, she remained in the role adopted by her during the marriage, caring for the children and the home. It was not until 2008 that the youngest child completed final school exams."

The Court recognized the wife's ongoing contribution as primary parent enabling the husband to work and progress his career, income and wealth as significant. The wife also appealed the Trial Judge’s decision in relation to the 10% adjustment for future needs being confined to the non-superannuation pool. The Court found the percentage to be within the range but decided that the Judge had fallen into error by restricting the adjustment calculation to the liquid asset pool only. The appeal was allowed in relation to both grounds, and the matter was remitted for rehearing before a different Judge. This case highlights the importance the Court may place on continuing non-financial contributions post-separation, particularly in cases where there are children of the relationship.

[62]-[66] are particularly helpful.

Katherine Guilfoyle