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Property Settlement Calculator – Case Study 2

Property Settlement Calculator – Case Study 2

The aim of the Property Settlement Calculator is to assist you in estimating what a fair and equitable division of property would be in the event that your relationship has irretrievably broken down.

The assumptions we have used in the Calculator were formulated after investigation of actual case history and rulings by Courts. We have also asked experienced family law practitioners to test the assumptions used in the calculator to see if the results a reasonably consistent with their own estimated equitable division of assets.

The aim of the Calculator is to provide a basis for discussion between the parties in the hope that an agreement can be reached so that the parties do not become victims of protracted and expensive negotiations between their respective advising lawyers.

Once the parties have agreed on the terms of settlement, the settlement can be documented by way of a Binding Financial Agreement or Consent Orders.

If you cannot reach agreement, then the decision may have to be made through the Courts.

There are no fixed rules employed by the Federal Circuit Court and Family Court Judges in reaching a decision regarding property settlements. Judgements seem to be based on a combination of common sense and the experience of the Judge, and are wholly dependent on the specific facts that surround each individual case.

While AussieLegal has taken every care in formulating the assumptions on which the Calculator is based, the results produced by the Calculator are in no way a guarantee of the outcome of your case.

Please Note

Any results provided by the Property Settlement Calculator are not legal advice and do not purport to be legal advice. If you wish to assess the suitability of any information provided in this case study and by the Calculator, please call AussieLegal on 1300 728 200 to discuss your situation.

Detailed Property Settlement Calculator Case Study 2

  • Tom and Nicole have been married for 5 years.
  • They have no children.
  • Both owned separate properties when they met.
  • Both properties were sold, and the profits applied to the purchase of a joint property.
  • Tom contributed $800,000 and Nicole contributed $400,000.
  • The property is now worth $2,00,000.
  • They have a home loan of $300,000.
  • They both work full time and earn similar salaries.
  • They both have substantial Superannuation funds and are well provided for in retirement.
  • They have made a similar contribution during the course of the marriage.

Please see the online Property Settlement Calculator for a more comprehensive explanation of the influences and assumptions used in the Calculator.

The table below contains a summary of the input data used in the Calculator. Please feel free to experiment by inputting the data for your circumstance.

https://aussielegal.com.au/property-settlement-calculator/

Tabular Form of Property Settlement Calculator Case Study 2

Length of relationship

Length of relationship

1/08/2018

1/8/2023

5.00 years

Influence of the age of children of the relationship

Age of child 1

N/A

 

0% influence

Age of child 2

N/A

 

0% influence

Age of child 3

N/A

 

0% influence

Age of child 4

N/A

 

0% influence

Influence on the time spent with each parent (days per fortnight)

 

You

Your partner

 

Days per fortnight

7

7

0% influence

Influence of future health needs

 

You

Your partner

 

Significant chronic health condition?

No

No

0% influence

Basic assets and liabilities at the start of your relationship

Asset

You

Your partner

 

Bank & credit union accounts

$800,000

$400,000

 

Real estate (primary residence)

$0

$0

 

Cars, boats & other vehicles

$0

$0

 

Investment accounts

$0

$0

 

Furniture & personal possessions

$0

$0

 

Superannuation

$100,000

$100,000

 

Liabilities

You

Your partner

 

Credit cards

$0

$0

 

Mortgages

$0

$0

 

Personal loans / car loans

$0

$0

 

Other debts

$0

$0

 

Net basic assets at the start of your relationship

 

$900,000

$500,000

 

Basic assets and liabilities at the time of separation

Asset

You

Your partner

 

Bank & credit union accounts

$0

$0

 

Real estate (primary residence)

$1,000,000

$1,000,000

 

Cars, boats & other vehicles

$0

$0

 

Investment accounts

$0

$0

 

Furniture & personal possessions

$0

$0

 

Superannuation

$300,000

$300,000

 

Liabilities

You

Your partner

 

Credit cards

$0

$0

 

Mortgages

$150,000

$150,000

 

Personal loans / car loans

$0

$0

 

Other debts

$0

$0

 

Net basic assets at the time of separation

 

$1,150,000

$1,150,000

 

Net capital gain

$250,000

$650,000

 

 

Non-basic assets and liabilities at the start of your relationship

Asset

You

Your partner

 

Family or other discretionary trusts

$0

$0

 

Private businesses

$0

$0

 

Inheritances

$0

$0

 

Family farms or rural properties

$0

$0

 

Liabilities

You

Your partner

 

Private business debt

$0

$0

 

Mortgages

$0

$0

 

Personal loans

$0

$0

 

Other debts relating to non-basic assets

$0

$0

 

Net non-basic assets at the start of your relationship

 

$0

$0

 

Non-basic assets and liabilities at the time of separation

Asset

You

Your partner

 

Family or other discretionary trusts

$0

$0

 

Private businesses

$0

$0

 

Inheritances

$0

$0

 

Family farms or rural properties

$0

$0

 

Liabilities

You

Your partner

 

Private business debt

$0

$0

 

Mortgages

$0

$0

 

Personal loans

$0

$0

 

Other debts relating to non-basic assets

$0

$0

 

Net non-basic assets at the time of separation

 

$0

$0

 

Net capital gain

$0

$0

 

How is the split of assets calculated?

You

Your partner

Share of basic assets from the start of the relationship to the time of separation

$799,945

$600,055

Share of accumulated basic assets from the start of the relationship to the time of separation

$450,000

$450,000

 

Share of accumulated non-basic assets from the start of the relationship to the time of separation

$0

$0

Share of all net assets

$1,249, 945

$1,050,055

 

54%

46%

 

Analysis of the Property Settlement Calculator Case Study 2 Results

Basic Assets

The Court must consider each parties’ respective contributions to the marriage – both financial and non-financial. Tom and Nicole was the main breadwinner and provided the initial deposit towards the purchase of their home. Jill was the primary carer for their children, has contributed her inheritance, added to the value of the home with DIY projects. Given the length of the marriage, the initial asset contributions by Jack and Jill’s role as home maker, the Court is fairly likely to consider the financial and non-financial contributions of each equal, and therefore the capital gain from all basic assets as shared equally. 

With respect to the basic assets that Jack had at the start of the relationship, Jill would be entitled to 5% of jack’s basic assets at the start of the relationship for each year they were together. In this case that means that Jill gets 25% of Jack’s starting basic assets, and Jack gets 25% of Jills starting assets.

Jack and Jill would share the capital gain on the joint asset.

Superannuation would be included as a basic asset for the purposes of the calculation of the division of assets.

Non-Basic Assets

Not applicable

Children & Other Factors

Not applicable

Online Property Settlement Calculator

https://aussielegal.com.au/property-settlement-calculator/

Documenting your property settlement

Once you have reached agreement on your division of assets, you have 2 options to formally document your settlement. We recommend that you make an informed choice based on the most cost effective way while meeting the requirements to be EXEMPT FROM STAMP DUTY and making sure the agreement is FULL AND FINAL FINANCIAL SETTLEMENT.

In summary, your options are:

  1. An Application for Consent Orders with legal advice and certification from 2 independent solicitors
  • Cost is $3,975 + Court fees of $450.
  • Court requires legal advice and certification from 2 independent solicitors.
  • Time is 2 to 3 months.
  • Requires formal declaration to the Court and solicitors of financials (bank statements, super statements house valuations etc).
  • Application for Consent Orders form is available from the Family Court website.
  1. Binding financial agreement
  • Cost is $2,995 including legal advice and certification from 2 independent law firms.
  • Time from beginning to signing is 3 to 4 weeks.
  • Only requires informal declaration to the solicitors of financials (recommended to exchange statements and supporting evidence of financial).
  • BFAs meet the requirements of super funds for super splitting, and the ATO and Offices of State Revenue for transfer duty exemption.
  • The BFAs are completely inclusive of the latest legislative changes.

AussieLegal works with a panel of independent law firms across Australia who provide the legal advice and certification so that the BFAs are fully enforceable in the Courts.

How the AussieLegal BFA PLUS service works:

  1. The price is fixed at $2,995 for 2 people, and includes the drafting of the BFA, revisions if required, plus legal advice and certification from 2 independent law firms.
  2. All our participating law firms are registered legal practices in Australia.
  3. A typical BFA takes 2 to 3 weeks to complete.
  4. You do not need appointments. It is all done via phone and email. We send you a questionnaire and ask you and your partner to fill it out and return it to AussieLegal.
  5. The questionnaire will also ask you for comments about what you wish to protect and achieve with the BFA.
  6. We use this information to create a first draft of the BFA.
  7. The draft BFA is then sent to 2 independent solicitors, one assigned to each of you.
  8. They will contact you to arrange a time to discuss the BFA over the phone.
  9. The draft will then be modified and updated according to each solicitor’s requirements.
  10. The solicitors will then issue a letter of advice and certificate.
  11. You will then both sign the BFA and the process in completed.

Please click on the following link to order the service or call me on 1300 728 200 to discuss your situation:

For more information on the documentation phase of the process, please visit our Binding Separation Agreements and Consent Orders pages on the AussieLegal website:

https://aussielegal.com.au/product/separation-binding-financial-agreement/

https://aussielegal.com.au/product/consent-orders/

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