Repayment of Partial Property Settlements – How They Work

Family court hearings can take a while. In some cases, the court may have to make an order that one or both of the parties receive a partial property settlement. This may help pay for the legal process or it become necessary when one party earns considerably less than the other. In the latter circumstances the courts use the partial settlement to level the playing fields.  

So, how will the court handle the characterisation of the amount received when the case comes to a close?

The court will make decisions throughout the course of the hearing. This means that it also has the discretion to change the amount that goes back into the property pool.

In making this decision, the court takes cognisance of how the money was used. If, for example, a portion of the partial property settlement was used for support the court may deduct this from the amount returned to the property pool.

In a recent case, one party, the wife, received $1,035,370 as a partial payment. She used the funds in a number of ways. Her expenses fell into the following categories

Legal fees               $858,232

Cash on hand          $ 60,554

Daily expenses        $116,583

The other party to the case argued that his wife should return the full amount of $1,035,370 regardless of how she’d used it. The wife pointed out that since she had used $116,583 for living expenses it was, in effect support and she shouldn’t have to pay it back.

The court listened to both arguments and after considering how the wife had spent the money, they agreed with her. The wife could pay back the original amount less the $116,583.

The court considers each case on its merits so how it deals with reverse orders will differ from case to case. Items that may have an effect on how much of the original amount must be returned are listed below

• Elapsed time since the orders were first made
• Whether the parties consented to the orders
• Final disposition of the property
• The extent to which the parties relied upon the orders

In the end, the courts will take account of all the circumstances affecting the partial order. Then they will decide whether to alter or reverse previous orders.