Family Courts are challenged to balance the skill of making money against the skill of managing a family

An online article in the Northern Beaches edition of The Daily Telegraph suggests that Family Courts should rethink the weight given to a special skill that one person brings to a relationship when dividing the property pool after the relationship ends. There is merit to both sides of the issue.

The law

When a relationship ends in separation or divorce and the couple cannot agree upon a property settlement, courts take several factors into account when dividing their property. A key factor is a contribution that each person made to the relationship.

Courts consider both financial and non-financial contributions. Financial contributions are usually easy to value. If one person earns $70,000 and the other person earns $30,000, a court might say that the higher earner’s contribution to the marriage was 70 percent of the combined contributions while the lower earners was 30 percent. If those were the only contributions to consider, the higher earner would receive 70 percent of the property pool and the lower earner would receive 30 percent.

Nonfinancial contributions are more difficult to value. If one spouse stays home and raises the children, prepares family meals, washes the clothing of family members, and keeps the family home in good condition, that person’s labor makes it possible for the other person to go to work and support the family financially.

The stay-at-home spouse sacrifices his or her own earning ability by staying out of the labor force while the working spouse continues to receive raises and promotions. The stay-at-home spouse has clearly made a significant contribution to the relationship even if it is difficult to measure that contribution in economic terms. That contribution must be reflected when dividing the property pool.

The question of special skills

As the article suggests, the “special skills” of a spouse or partner have sometimes influenced courts to skew a property settlement to the benefit of the spouse who possessed those skills. Suppose, for instance, that a spouse is a gifted money manager. If the spouse implements smart investment strategies that double a couple’s savings, a court might increase that spouse’s share of the property pool to reflect the benefit the couple received from the contribution of that spouse’s special skills.

Is that fair? In some cases, it might be. If both partners work and earn comparable wages, the increase in the property pool that is attributable to special skills might justify giving a larger share of that pool to the person responsible for its increased value.

In the case of the stay-at-home spouse, however, it may be unfair to reward wise investing as a “special skill” without recognizing that raising well-adjusted children also takes a special skill.

Fortunately, courts are increasingly giving due weight to nonfinancial contributions, particularly in long relationships when the parties have a history of treating each other as equal partners to the relationship.