What Happens With Join Assets When a Relationship Breaks Down?

When a relationship breaks down, and legal proceedings to split up common property are looming, there are times when one partner will attempt to shrink the settlement by offloading assets or through reckless spending.

In a trick worthy of the world’s greatest illusionists, where once there was an asset, soon there is nothing left.

Cases that have gone before the courts include the taxi driver who sold his taxi license plate, spending the proceeds before the marital assets could be assessed, and a wife who gambled away about $140,000 in joint funds over the course of 18 months.

For the victims of these subversive attempts to avoid an equitable distribution of marital assets, there can still be legal recourse.

While the court will generally identify and evaluate the assets of both parties as of the date of the hearing, there are exceptions.

From the 1980s, the judicial system recognised the injustice of the situation, initially allowing the value of certain assets that had been offloaded by one party to be notionally “added back”.

More recently, the High Court ruled that considering assets that were no longer retained by either party did not sit well against current laws, however that didn’t mean that offloaded assets were no longer relevant.

These dissipated assets can still be considered as “negative contributions”, or the Court can find that for “the justice of the case” they are required to be taken into account.

“Negative contributions” can be considered within the assessment of contributions. Either the party who disposed of the assets can be seen to have provided a negative contribution, or the other party may be seen to have made a greater indirect contribution to the remaining legal and equitable interests.

Not every case where assets are dissipated will be seen to involve an affront to justice and equity, with the individual circumstances needing to be assessed, but in many situations there is the opportunity for legal recourse.