As cases proceeding through the courts are taking longer to be determined on a final basis, issues regarding post-separation assets and liabilities are becoming more and more common.
The issue is how assets and liabilities acquired after separation are to be treated.
It understandable and common for a party who has acquired assets after separation to believe that they should be able to retain and have full claim to those assets. However this may not always be the case.
The court assesses the net assets and liabilities of the parties as at the date of settlement or trial. This means that all existing property, regardless of when it was acquired (before or after separation) is generally included in the pool of assets.
The issue then becomes a matter of contributions and how the court assesses those contributions.
In practice it is common for parties to agree or for the court to direct that minor assets and liabilities be excluded from the pool of assets. The parties are then left with how significant assets acquired after separation are to be dealt with.
This becomes further complicated when the post-separation asset has significantly increased in value from when it was acquired to the date of the hearing.
The assessment of contributions is not a mathematical calculation and must be weighed against the contributions of the other party.
Often one party may have made greater post-separation financial contributions. However the other party may have made greater post-separation contributions as the homemaker and parent. Although the latter contributions cannot be calculated in dollar terms, they are no less important.
There have been cases where significant assets or monies have been acquired after years of separation. However, the courts have still made those assets or monies the subject of property division.
The treatment of post-separation debts largely depends on the facts and circumstances of the case, and the discretion of the judge.
In practice, it is likely that debts solely incurred by one party after separation will be treated as belonging to that party alone.
In determining whether debts acquired post-separation will be shared by the parties, factors to be considered may include whether the debt is genuine and payable, whether it was reasonably incurred, and the reasons for incurring the debt (such as for child expenses, relocation or living expenses).
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