Most family law property matters approach the division of
parties’ assets by adding everything together into one ‘pool’ of assets and
then dividing up the total value of that pool. However in certain
circumstances, a Court may take a different approach where the facts support
departing from the usual system.
One such case was the matter of Arthur and Arthur (http://www.austlii.edu.au/au/cases/cth/FamCA/2016/324.htm)
, decided by Judge Rees in Sydney in May 2016. In that case, Ms Arthur was due
to receive a sizeable - $535,000 – inheritance from her mother’s estate, her mother
having passed away after the Arthurs’ marriage had broken down. The rest of the
assets totalled approximately $800,000, meaning that this inheritance would
have been a very significant factor in working out each party’s contributions,
if it was included.
However Judge Rees determined that the inheritance should be
kept separately and that Ms Arthur would be considered to have contributed 100%
to that pool of assets, and that she should simply keep the inheritance. This
was a practical way to deal with the matter, but had the effect of producing a
note-worthy result in the rest of the assets.
Mr Arthur’s family had provided significant support to the
parties during their relationship, transferring as much as 75% of a house to
them without really expecting any payment back. In addition, the parties were
allowed to live rent-free in the property for many years even though it was
owned by family members of Mr Arthur.
Mr Arthur earnt significantly more than Ms Arthur, who had
significant obligations as a carer and whose employment prospects were
uncertain. Nevertheless, Mr Arthur received 80% of the non-inheritance asset
pool. This is a high percentage of assets on a pool of this size, and Ms Arthur
did not receive a larger percentage because she was going to have the benefit
of the very large inheritance she had received and was going to retain, meaning
the inheritance was a double-edged sword for her.
What does this mean for parties contemplating a separation?
Look after your parents!
