Deidre was distressed. A new client, it soon became clear something was not right. A gentle push and she spilled the beans. Her long term relationship with Darryl was breaking up and she was scared she would lose her kids, her home and most of what she had worked for over the last ten years.
Deidre and Darryl met about eighteen years earlier. Darryl was older, and in the Army. Deidre was younger, just eighteen, and virtually on the streets, sofa-surfing for sleep, having fled an unhappy home and an abusive father. Darryl took her in and encouraged her to study. She was a duck to water, blitzing HSC and then on to medical school and ultimately specialized training as a surgeon.
Darryl was her rock. He supported and encouraged her every step of the way. When their first child arrived Darryl left work and became the primary carer. It made sense: Darryl would never have Deidre’s earning capacity, and her work had a nobler social purpose.
Darryl loved the parenting life and was a great dad to their three kids.
They never married. Never saw the point of it.
Deidre was driven. Even obsessed. It was all about her work, and she really worked. Her income was sky high and she invested well. Her long hours left her with virtually no friends, and she relied on Daryl for their social connections. It’s fair to say Deidre was very materialistic, and prided herself on their fine possessions: she was over-compensating for her earlier hardships. You did not have to be Sigmund Freud to work that one out.
Deidre’s family trust was bulging with assets, including their family home. She was the sole director and appointor. It was all about control, asset protection and tax minimization.
But now their relationship was over.
Where did Deidre stand? With the money? With her home? With her kids?
Since 2009 de-facto relationships have been subject to the Family Law Act, and unless a binding financial agreement exists the FLA controls the division of property and the custody of children. It does not matter that you are not married. The law is better than that.
Few marriages end with a 50/50 property division. In the case of Deidre and Darryl it will probably be 25/75. That is, Deidre gets 25% and Darryl gets 75%. The assets in the trust are included in this division: nominal ownership is not relevant and controlled trusts are included. The court divides the property in whatever way it thinks is fair, and considers facts like:
- the length of the relationship
- the financial contribution of each party
- the non-financial contribution and
- the current and future needs of each party.
It did not matter that Deidre had contributed most of the assets. Darryl’s non-financial contribution as the home-maker and child carer was just as important, if not more important, and he has a much lower future earning capacity.
Darryl will get most of the assets, including their home.
Deidre was very upset to hear this and pointed out the marriage break-up was Darryl’s fault: another woman was involved. It did not seem fair that he wrecks the marriage and then walks out with 75% of the assets. It may not be fair. But that’s what happens: Australia has a no fault approach, and does not judge the parties’ conduct.
But the real issue is custody of their three kids. Deidre was hurting. She had stepped away from their details to concentrate on her career, and carried the guilt to prove it. Darryl was getting custody, and had threated to move interstate. She could visit when she could.
There is no rule that the kids go with mum. If there is a rule, it is that pre-separation arrangements tend to continue post-separation, since they reflect the roles within the relationship. And the pre-separation arrangements had Darryl as the only care giver.
I really felt for Deidre on that one. Its seems almost natural that kids should be with their mother.
But that’s not the way the Family Law Act works.