Matrimonial Asset Pool: How is it valued and divided?

If you have recently separated from your spouse or de facto partner it is advised that you seek to finalise your property settlement sooner rather than later. This will help you avoid post separation asset or debt accumulation being factored into your property settlement.

The first step in a property settlement is to compile an accurate list of the assets and debts, including values.

What assets are included in the matrimonial asset pool?

In a family law property settlement, the net asset pool is the total value of all matrimonial assets minus the value of all matrimonial liabilities.

For some couples this may be simple to determine, however for other couples this is a far more complex equation.

The asset pool includes assets which are:

• Owned by either party prior to the marriage or de facto relationship
• Accumulated during the marriage or de facto relationship
• Acquired post separation

Common assets are:

• Family home
• Investment properties
• Motor vehicles / boats
• Personal property (jewellery, artwork, personal belongings of value)
• Household items (furniture, white-goods etc.)
• Superannuation
• Savings
• Stocks and shares
• Business interests

Common liabilities are:

• Mortgage debts
• Credit card
• Personal loads
• Hire purchase agreements

Related Article: We’ve Agreed On Our Property Settlement, How Do We Now Make It Legal?

How are the matrimonial assets valued?

Having a true value of matrimonial assets and liabilities is obviously ideal in negotiating a property settlement. Some items may be comparatively easy to determine their value, however some may be a source of contention.

Typically this is how matrimonial assets are valued:

Real Estate

Determining and agreeing on the value of real estate is dependent on the separating parties. Either appraisals from local real estate agents can be obtained to determine the likely market value of the property or an independent property valuer can be hired to determine the value of the property. A value obtained by qualified property valuer will be considered preferable by the Courts if there is a dispute over the value.

Business Interests

For a business valuation an independent valuer will value the business for the purpose of the property settlement, which is not the same as the value of the business if it were to be sold. In a property settlement, the valuation looks at the value to the owner, for example, what are the benefits that the owner would receive if they retained their interest in the business.

Depending on the size and type of business, an independent valuer is likely to take into account:

• The stability of the earnings.
• Estimations of future cash-flow.
• Estimations of profits if the business were to be sold.
• Whether the business has stopped or is continuing operations.

Motor Vehicles

Depending on the type of motor vehicles, it may be easy enough for a separating couple to research their vehicles value via online car sales website. Otherwise, a jointly appointed expert can be used to value the vehicle.

Personal Property

Personal property such as jewellery and furniture are valued in accordance to the conservative approach the Courts adopt, which is often a second-hand value, rather than an insurance or replacement value.

How are the matrimonial assets divided?

Ideally property settlement would be negotiated out of Court, either independently by the separating couple via mediation. If an agreement is unable to me made and the case goes to Court, the Courts will make a decision it believes is ‘just and equitable’ for both parties.

The Courts consideration will be based on:

• working out what you’ve got and what you owe, that is your assets and debts and what they are worth
• looking at the direct financial contributions by each party to the marriage or de facto relationship such as wage and salary earnings
• looking at indirect financial contributions by each party such as gifts and inheritances from families
• looking at the non-financial contributions to the marriage or de facto relationship such as caring for children and homemaking, and
• future requirements – a court will take into account things like age, health, financial resources, care of children and ability to earn.

Note: This is general information advice only and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters, please contact us on 03 9620 0088 or email info@resolveconflict.com.au