Property acquired after separation- what is the Court’s approach?

The recent decision in the Family Court of Western Australia of Calvin & McTier [2017] illustrates how the Family Court treats property acquired after separation and is a stark reminder of the importance to formally divide the assets of the relationship as soon as separation occurs.

Mr Calvin and Ms McTier were married in 2002 and were divorced in 2011.  There was one child of the relationship born in 2005.

Upon separation, neither party sought to formally divide the matrimonial assets.  The Family Law Act 1975 provides that parties have one year from the date of divorce to initiate proceedings in the Family Court for the division of matrimonial assets, unless leave is granted by the Court to initiate proceedings out of time.

In 2015, the Court granted leave to Ms McTier to initiate proceedings out of time.  Prior to initiating proceedings and after separation, in 2014 Mr Calvin received an inheritance from his father’s estate.

At the time the matter reached trial, the Husband’s inheritance totalled $430,686 and accounted for approximately 32% of the net matrimonial assets.

The Court found that despite the inheritance being acquired by Mr Calvin some 3 years after divorce, the inheritance should be included in the pool available for division.

Ultimately the pool was divided 65% in Mr Calvin’s favour and 35% in Ms McTier’s favour.

The lesson here is that any property acquired after separation including windfall benefits like inheritances and even lotto wins are not excluded from the matrimonial pool available for division.

If you are recently separated or divorced, your financial relationship with your ex-spouse continues until property orders are made.

If you require advice in relation to the division of matrimonial assets, please contact one of the family lawyers at Scanlan Carroll.