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By Kristy-Lee Burns, Partner at Owen Hodge Lawyers
Photo by cottonbro studio: https://www.pexels.com/photo/woman-in-white-dress-shirt-and-black-skirt-sitting-on-gray-couch-4098224/
During a divorce or separation, determining how property is divided between parties so that it is fair is influenced by two key factors: contributions and future needs. This ensures that the division of assets is fair and equitable.
In a recent case of mine, Costello & Langdon [2024], I helped secure a favourable outcome for our client, amid complex legal challenges surrounding property settlements, contributions and future needs. The case holds important lessons around the interplay between contributions and future needs and how they impact how assets are divided.
Before we explore this case in detail, let’s look at what we mean by contributions and future needs.
What are contributions?
Contributions refer to the financial and non-financial inputs each party brings to the relationship.
Financial contributions can include income, savings, and investments, while non-financial contributions encompass homemaking, caregiving, and support roles. Both types of contributions are considered when determining how assets should be divided.
What are future needs?
Future needs refer to each party’s individual circumstances now and going forward, including:
- Age and Health: Older or less healthy individuals may require greater financial support.
- Income and Employment Prospects: A party with limited income or career prospects may be at a disadvantage.
- Care Responsibilities: Those who have primary caregiving responsibilities, particularly for children, may require additional resources to ensure stability.
Case Study: Costello & Langdon [2024]
In the case of Costello & Langdon [2024], Mr. Langdon and Ms. Costello were in a de facto relationship for decades. After Mr. Langdon was moved to a nursing home due to dementia, his son became his litigation guardian, prompting disputes over property settlement.
Ms. Costello had already contributed $100,000 to Mr. Langdon and offered an additional $50,000. However, the court ultimately ordered her to pay $758,903. This decision was based on the assessment of contributions and Mr. Langdon’s significant future needs. The court determined that while Ms. Costello had made greater financial contributions, Mr. Langdon’s health condition created unmet financial needs that warranted a substantial settlement.
The court emphasised that the relationship had ended voluntarily in 2021, which differentiated this case from similar precedents. It ruled a 64/36 division of property in favour of Ms. Costello, reflecting her contributions while also addressing Mr. Langdon’s health-related requirements.
The case underscores the importance of recognising both contributions and future needs in property settlements. For anyone going through a separation, understanding these factors can empower you to advocate effectively for a fair outcome.
Consulting with legal professionals can provide valuable guidance as you navigate this complex landscape, ensuring that both your contributions and future needs are appropriately considered.
About Kristy-Lee Burns
Kristy-Lee Burns is a Partner at Owen Hodge Lawyers. Kristy-Lee has headed up the Family Law department since 2018. Kristy-Lee has trial experience in various complex family law matters involving trusts and commercial matters. Kristy-Lee has expanded her knowledge and experience to include Estate Litigation and Testamentary Trust Wills. Kristy-Lee has completed a specialist post-graduate program of LLM Applied Masters (with a double major in Family Law and Business Law). Many areas of family law and commercial law intersect so it is important to Kristy-Lee that she identify and strategically advise her clients on these matters. Her trial experience in preparing matters with strict deadlines is also a skill that serves her clients well.
Kristy-Lee’s legal knowledge, communication skills and life experience, together with her ability to relate and connect with people in challenging times assists her in building and maintaining excellent client relationships and ongoing referrals. Kristy-Lee also prides herself on mentoring and managing other younger solicitors within the practice.
Whether it is a complex property settlement involving third parties, businesses and trusts, a commercial or estate dispute, Kristy-Lee has the knowledge and expertise to identify the key legal issues whilst advocating in your best interests for a just and equitable result.