Do special skills affect the distribution of the property pool in a separation?

There are many reasons why a couple may argue about the way their assets are divided on separation and it can be difficult for the Family Law Court to make decisions about the division, especially when the amount of assets is particularly large and one or other of the parties in the relationship claims that they have added to the asset pool because of an extraordinary amount of effort or through “special skills”.

In most cases, the asset pool of a couple is divided according to a recognition of the contributions that each person has made during the course of the relationship, taking into account that contributions can be both direct (e.g. earnings or salary) and indirect. For example, consider a family which starts out with a couple who are both young and more or less equal in terms of assets.

The couple marries and has children. One of the parents earns most of the money from a job, while the other stays at home and looks after the children and the home. After a period of time, the couple separate.

The court will probably divide the property pool evenly, based on the fact that even though one of the parties earned most of the money, the other contributed to that money earning by making it easier for that person to earn it by looking after the home and children. The asset pool may very well be divided in this hypothetical example 50:50 to each person.

When one or the other of the couple inherits a substantial amount, then the property may be divided in favour of the person who has inherited the money because that person has benefited from his or her relationship with other people.

The difficulty emerges when one person in the relationship claims that they have contributed far more than the other because of “special skills”. This may come from extraordinary effort, or clever investment(s), or because of particular entrepreneurial ability. In most cases where a “special skills” claim has been made during a property dispute, the asset pool is substantial i.e. over $10 million.

In fact, there is no specific ruling in the Family Law Act that suggests that an allowance for special skills be made during the course of a court decision. Most claims of this nature are dealt with on a case by case basis with case history helping to shape the course of the law rather than a specific ruling.