Ali and Irene had been in a defacto relationship for 6 years and had recently separated. They didn’t have any children. The separation was amicable, and Ali informed us that he and Irene had agreed that all assets should be divided equally. Ali and Irene had each come to the relationship with minimal assets, had earned similar wages, and had acquired everything that they owned throughout the relationship. At separation, Ali and Irene had a jointly owned home with a large mortgage, a relatively new car subject to a loan, a significant amount of furniture, and relatively similar superannuation entitlements. Irene had moved out of the home by this point, and Ali and Irene had since divided all furniture by agreement. Considering all relevant factors, we considered a 50/50 split of assets to be appropriate in the circumstances.
When Ali first came to us he informed us that he had hoped to retain the home, but was unsure as to how to go about this whilst accounting for Irene’s interest in the property. We referred Ali to a mortgage broker so he could work out his borrowing capacity, and also advised him to get three market appraisals for the property anticipating that a value could be agreed without the expense of a valuation. The three market appraisals obtained by Ali varied by approximately $20,000; and Ali and Irene agreed to value the property at the average of the three. We were thereafter able determine how much Ali would have to pay Irene to account for her share in the property.
Ali informed us that Irene sought to retain the car, which the parties had purchased by way of a loan. Ali obtained and online appraisal of the value of the car. Upon obtaining the valuation it was clear that the value was significantly less than Ali and Irene had anticipated. Taking into account the loan used to finance the purchase of the car, there was little equity in the car. The amount of equity in the car had to be taken into account when determining the cash amount that Ali would have to pay Irene to give effect to a 50/50 split overall.
We thereafter prepared consent orders which provided for Ali to retain the home in his sole name, subject to refinancing the mortgage into his sole name, and making an appropriate cash payment to Irene. The agreement also provided for Irene to retain the car in her sole name, subject to refinancing the car loan into her sole name. The agreement otherwise provided for each to retain all superannuation in their name and furniture in their possession.
For further information or assistance please contact Sarah Bevan Family Lawyers.
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