The Court’s Approach
Our approach, and that of the Family Court, is based generally on the following 4 step process:
Step 1: Net Pool of Assets
To identify and value all current available property, liabilities and financial resources. An item can be considered property of the marriage whether it is in one parties sole name or even in an outside party’s name in some circumstances.
Step 2: Contributions
To identify the contributions that each party has made during the relationship to the acquisition, conservation or improvement of all of the property now existing or having existed in the past; and as a homemaker and parent and to the welfare of the family.
It is important to note here that “contributions” is not a narrow word. Contributions may be financial, and they may be either indirect or direct financial contributions. Direct financial contributions are easily understood. Money is earned or acquired, or property is acquired or contributed. Indirect financial contributions fall into two separate categories. The first of these is generally speaking money inherited or given by family members or interest free loans or free accommodation. The second category is the kind of indirect contribution that arises where one party alone earns income but the efforts of the other party in another sphere make that income stream possible.
Step 3: Future needs
Considerations under this heading relate to the responsibility of either party to care for a child, the future income earning potential of each party relative to the other, the future financial resources of each party relative to the other (for example an entitlement to a deceased person’s estate or benefits received from a family trust), the health of each party, and any other matter bearing on the ability of each to maintain himself and herself for the future.
Step 4: Just and Equitable.
The Court then considers whether the adjustment based on the above factors is just and equitable in all the circumstances.