What happens to property owned before marriage?
A common question regarding property division is, ‘if it was mine to start with, can’t I just keep it’? It depends on the circumstances, but property owned before marriage is rarely excluded from the property pool during a divorce.
In almost all cases here are the short answers:
- Is a house owned before marriage martial property? Yes.
- Does getting married change who owns your home? No.
- Does a house bought before marriage get included in a divorce or separation? Yes.
And here’s the longer answer:
The definition of property in the Family Law Act is very broad, and essentially it involves everything each person has, regardless of the name the asset is registered in.
The four steps of property division are:
- Identify and value the assets, liabilities, and superannuation of each person.
- Assess and weigh the contributions to the welfare of the family including any contributions as a homemaker or parent.
- Assess the future needs of the parties, for example the age, health, income, property, financial resources of each person, and whether they have the care of children under 18 years of age.
- Ensure the orders and percentage division of the property and the practical effect of the orders are just and equitable.
Note the second step requiring the court to consider the “contributions” of each person – any property you owned at the start of your relationship falls into this category and is called an “initial financial contribution”.
Initial contributions are considered in light of other contributions made during the relationship and it is very rare for any property to be excluded from inclusion in the property pool, regardless of where it came from or whose name it might be registered in.
Here are some examples:
- If your ex made significant initial financial contributions – if your ex made a significant contribution of similar value to yours or more, it would likely take the spotlight away from yours when the court decides who made the greater initial contributions.
- How the asset was used – if your initial contribution benefited your relationship and increased the wealth of you and your partner, your initial contribution may carry significant weight for you. For example, if you previously owned a property worth $600,000, sold it during the relationship for $1 million, and applied the proceeds towards the purchase of a home worth $1.5 million
- If the value of the asset has increased due to your efforts – the court has considered whether the value of an initial contribution has increased at all, and if so, whether it was due to a person’s physical contribution, e.g. maintaining a farm, or was it luck, e.g. a lottery win.
- The length of the relationship – if your relationship was short, the court may attach greater weight to your initial contribution. In contrast, it may have less weight attached to it if you had a long relationship, e.g. 15 years or more.
- If the contribution was kept separate – if your initial contribution was kept separate from your other collective property, and particularly if your relationship was short, the court may decide to look at the assets in isolation, which may mean you get to keep the property. If your initial contribution was intermingled with other property, the court may take a different approach.
It’s important to note that you and your former partner could even agree you can keep your initial contribution, but you may find the court won’t allow it, if the court feels the decision is not “fair” in the circumstances.
Here at Michael Lynch Family Lawyers, we can provide advice tailored to your unique situation. If you have questions about separation, property division, or any other family law matter, contact our office on: (07) 3221 4300 or by emailing: [email protected]
