The family court has said that after separating, “parties are entitled to… properly [get] on with their lives.” So, for those people who have separated, and are ready to take the next step with their new partner – fear not! The law is on your side.
If you’re ready to buy that engagement ring for your new partner, or if you are the new partner, the first thing to ensure is that the ring is not being purchased from funds which existed at or prior to the separation of the partner from his former partner. You should ensure that funds being used to buy the ring were acquired entirely post-separation.
If, for example, after you have separated from your former partner, you sell the car you acquired while you were with your former partner, and then use that money to buy the engagement ring for your new partner, this would constitute a “premature distribution” of matrimonial assets on your part.
This doesn’t mean that you have to give the ring to your former partner; it just means that the Court will consider that you have therefore had the “benefit” of that matrimonial money and an adjustment may as a consequence possibly be made in favour of your former partner out of the net assets that are available for distribution between you.
That’s not to say that every time you spend money that was acquired during the relationship with your former partner, you have to effectively account for it in your property settlement with your former partner. Parties are able to use funds acquired during a former relationship for day to day living expenses post-separation where needed. However, the purchasing of an item such as an engagement ring for a new partner, would not be considered such a “day to day expense”.
In family law proceedings, so far as practicable, the Court has a duty to end the financial relationship between the parties to a marriage or a de facto relationship. The court must also ensure that it does not “alter the property rights of the parties, unless justice requires it to do so”.
This means that if you buy an engagement ring on a credit card and pay off that credit card debt from funds that you obtained entirely post separation, be that on your own or with the assistance of your new partner, you can expect that the engagement ring, or its value, would not be treated as part of the property pool available for division between you and your former partner. However, where assets are required by a party from post-separation income, they may be considered in the property settlement with the former partner in so far as those assets are available to the party.
If you have any questions on how to move forward financially with your new partner, when you have not yet finally settled your financial relationship with your former partner, call our family law team on (07) – 3506 3651. We can offer you experienced property settlement advice.