Why is premarital property also divided during divorce?

Key Principles of Property Division in Divorce in Australia

In Australia, divorce often involves complex property split. Understanding the principles of this process is crucial to protect your interests. 

Fairness is the main principle. Typically, especially in long-term marriages, the court aims for an equal split of property, as long as it is fair. However, this is not a strict rule and the court will make a judgment based on each case. 

To ensure a fair outcome, the court looks at several factors, including:

• Contributions During the Marriage: This includes financial contributions and non-financial ones, such as taking care of the family and raising children. 
• Future Needs: The court will assess the age, health, earning capacity of both parties, and responsibilities for raising minor children. 
• Duration of the Marriage: Generally, the longer the marriage, the more likely the court will lean towards an equal division of property. 

What Gets Divided? 

During a divorce, all jointly owned property may be divided. This includes: 

• Real Estate: Whether bought before or during the marriage. 
• Savings and Investments: Bank deposits, stocks and other investments accumulated during the marriage. 
• Vehicles and Personal Belongings: Including cars, furniture and valuable items. 
• Pensions: Retirement funds accumulated during the marriage. 

Even if certain assets are legally in one person’s name, if they are considered joint property during the marriage, they’ll be part of the division. 

Why Pre-Marital Property Gets Divided? 

In Australia, property acquired before or during the marriage is considered joint property. This means even assets owned before marriage could be divided if they were used for joint living or investments after marriage. 

Common scenarios include: 

• Joint Living and Investment: Pre-marital property used to buy the marital home or significantly invested in after marriage. 
• Joint Loan Repayment: Even if a property was purchased before marriage, if the loan is repaid using joint income after marriage, it could be considered joint property. 

For example, if you bought a house before marriage but continued paying the mortgage with joint income after marriage, that house might be considered joint property. 

How Much Pre-Marital Property Can the Other Party Get? 

The exact proportion of property division depends on multiple factors, including each party’s contributions during the marriage, the value and nature of the property, and future needs. The court takes all these into account to decide a fair division. (Continue Reading: Splitting Assets? 3 Key Things Judges Consider!)

However, in Australia, the court treats short-term and long-term marriages differently in terms of property division. For short marriages (less than five years), the court focuses more on financial contributions and tends to preserve the financial status quo of both parties before the marriage. This means pre-marital property may not be treated as joint property. 

In long-term marriages (more than five years), the court values both financial and non-financial contributions, considering both pre-marital and post-marital property as joint property for division.

If you have any legal questions regarding prenuptial agreement, please contact us immediately. Our lawyers will answer your legal questions and provide you with professional strategies to safeguard your rights.