The Property Act 1976 presents rules on the distribution of property when a relationship ends on divorce or separation. The Law Commission has recently evaluated this Act, creating a number of key proposals in an Issues Paper. The Commission has reviewed submissions from the public on its key proposals with a view to making its suggestions to the government.
Law Commission proposes the family house will not be divided equally just because it was used by the partners as a family residence. The Law Commission recommends that if one spouse owned the family home before the start of the relationship, only the increase in the price of the family residence occurring during the bond should be distributed equally upon bust-up.
Sharing Income after Separation
The Commission recommends the concept of a Family Income Sharing Arrangement (FISA) to make sure that where the couple has kids or have been in a relationship for long span, the partner who earns less during the relationship is not financially disadvantaged on a parting. This idea is accomplished by permitting that partner to participate in the income of the other partner for a period of time after separation. A judge will be able to put in place a FISA if a couple has kids together or a couple has been in a relationship for 10 years or longer, or one person sacrifices his or her career to make contributions to the relationship or supported the other to build his or her business.
Where these conditions exist, it is suggested that a FISA will balance the partners’ incomes following divorce or separation using a statutory formula for a set period of time.
Courts to have greater powers in relation to trusts
The Law Commission proposes that the courts will have more extensive powers to grant relief when a trust holds an asset that was created, maintained or improved by the relationship. This includes powers to order one partner to pay compensation to the other, trustees to distribute capital from the trust to one of the partners, a variation to the terms of the trust to benefit one of the partners and, some or all of the trust property is resettled on to a new trust or trusts.
The Courts are supposed to consider the best interests of the children to the relationship a fundamental consideration under the Act. It is proposed that the Act will clearly include provisions to make sure that there is an overarching responsibility on the Courts to have regard of the best interests of children. A key proposal from the Commission is that the primary caregiver and children should be given a primary right to stay in the family home after the separation between parents.
We can help you with your relationship property doubts and provide expert opinion on how the above proposals may affect your and your children property rights. We can also provide comprehensive advice on the process of entering into a relationship property contract.