Exploring Divorce Settlements: What Is A 60/40 Split In Divorce?
What is a 60/40 split in divorce?
A 60/40 split in divorce refers to the partition of assets in which one party receives 60% and the other receives 40% of the marital assets.
This division is not predetermined or standardised under Australian law; it depends on the particular circumstances of each case.
Section 79 of the Family Law Act of 1975 specifies the procedure for determining divorce property settlements.
This involves evaluating the financial and non-financial contributions of each party, as well as their future requirements.
Considerations include the care of children, age, health, financial resources, and ability to earn a living.
After taking into account all of these factors, the Court will aspire for a division that is "just and equitable."
Consequently, a 60/40 division is allowed if the couple's circumstances warrant it.
What Is A 60/40 Split In Divorce, And How Is It Computed?
What is a 60/40 split in divorce, and how is it computed?
Let's establish a hypothetical divorce settlement in Australia, where the property is divided 60/40.
Please remember that this is a simplified example, and actual cases may be significantly more intricate and complicated, requiring legal counsel and court decisions.
Scenario: A couple is divorcing after 20 years of marriage. They have two children, aged 15 and 17.
Their total assets amount to AUD 1,500,000, which includes their house, cars, savings, investments, and superannuation.
They also have a mortgage on the house of AUD 300,000 and credit card debts totalling AUD 20,000.
Step 1: Identify the Asset Pool and Deduct Liabilities
The couple's total combined assets amount to AUD 1,500,000.
Their total liabilities (the mortgage and credit card debt) amount to AUD 320,000.
The net asset pool would thus be AUD 1,180,000 (1,500,000 - 320,000).
Step 2: Assess Contributions
Assuming both parties contributed equally during the marriage, both financially and non-financially, an initial 50/50 split of the net assets seems reasonable based on their contributions alone.
Step 3: Consider Future Needs
The wife has been a stay-at-home parent for the past 10 years and will be the primary carer of the children post-divorce.
She has lower earning potential and a greater burden of care. The court may therefore adjust the initial 50/50 split to consider these future needs.
Step 4: 'Just and Equitable' Adjustment
The court determined that a 60/40 split in favour of the wife would be just and equitable, considering her lower income, job prospects, and the fact that she would be the primary carer of the children.
Final Calculation:
So, the final division of assets to know the answer to the question: What Is A 60/40 Split In Divorce would look something like this:
Wife: AUD 1,180,000 * 60% = AUD 708,000
Husband: AUD 1,180,000 * 40% = AUD 472,000
Can My Wife Still Claim on My Future Earnings After the Finalisation of Divorce and Property Settlement?
Once a property settlement has been finalised - whether through a Binding Financial Agreement (BFA), Consent Orders approved by the Family Court, or a court order following litigation - neither party can typically claim the other's future earnings.
A property settlement aims to establish a clean financial separation between the parties.
It involves contemplating future requirements, such as child care, age, health, financial resources, earning capacity, etc., at the time of settlement.
This is considered when determining the percentage distribution of the asset pool.
Does The Law Always Take The Side Of The A Housewife In Property Settlement?
What is a 60/40 split in divorce, and does the law always favour the housewife in property settlement issues?
No, the law does not always favour the housewife, or any party, in a property settlement.
In Australia, the Family Law Act 1975 establishes the framework for property division upon separation and divorce, and it does not inherently favour one party over the other based on their role as a housewife or breadwinner.
The law instead requires a just and equitable division of assets. It considers various factors, including the direct and indirect financial and non-financial contributions made by both parties during the relationship and their future needs.
Direct financial contributions include wages from employment, while indirect financial contributions involve gifts or inheritances.
Non-financial contributions can consist of homemaking and caring for children, which a homemaker often performs.
Regarding future needs, the court considers factors such as age, health, financial resources, care of children, and ability to earn income.
Suppose one party, for instance, the housewife, has a lower income-earning capacity and greater childcare responsibilities. In that case, they might receive a larger portion of the assets to offset these future needs.
Do I Have To Declare Everything I Own and My Income in Property Settlement?
Yes, you must provide complete and frank financial disclosure to your former spouse and the court when going through a divorce or separation.
This is a fundamental part of family law proceedings in Australia under the Family Law Act 1975.
The requirement for full disclosure applies to all parties involved in property settlement matters and includes all income, property, financial resources, and liabilities, regardless of whether they are in your name, held jointly, held by a third party, or held in a trust.
This includes assets and liabilities acquired before the relationship, during the relationship, and even those acquired after separation.
Your disclosure obligations also include providing information about any disposal (sale, transfer, assignment, etc.) of property made in the year immediately before the separation or since the final split to reduce the other party's claim.
If you fail to disclose an asset, you may face serious consequences. The court can set aside a financial agreement or orders and impose costs or fines.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
