It is no secret that the Courts place a high value on the contribution of the stay-at-home parent or homemaker.
Family Law Courts place a high value on the contribution of the Stay-at-home parent or homemaker as shown by the recent case Elgin & Elgin
In a high profile case handed down earlier this year, Elgin & Elgin, Justice Forest has awarded a stay-at-home mother and homemaker 50% of the family’s assets, seeing her role as equal to that of her high earning, long-time husband. He reiterated that the husband’s accumulation of specific assets of the relationship, was not relevant.
It is common, in the context of Australian families, for one parent to work full time (usually the male, but not always), while the other takes on a full-time role as home maker and parent. This results in the stay-at-home parent forfeiting his or her opportunity to accumulate wealth, superannuation and progress their career in order to focus on raising the children and home life.
Such differences in roles can sometimes lead to confusion and misunderstandings if property needs to be divided in the event of a relationship breakdown. This is especially the case if one partner’s efforts are seen as being directly linked to the accumulation of specific assets.
The decision emphasises the high value the Family Court places on the role of the stay-at-home parent.
Background
The husband and wife met in the 50’s and married at the tender ages of 19 and 20. As so often is the case, they started out with little. Three children were born to the couple, who were married for almost 49 years before separating in 2009.
Although the wife did work for a time outside of the home, it was the husband who worked long and hard through the relationship amassing wealth in the vicinity of $44 million.
The husband had built up and sold a successful business and then began developing property with great success. He generated a large amount of wealth over the years.
Adding to this, was an inheritance by the wife of $1.3 million.
After gifting each of their children at least $6,000,000 over the term of the relationship, the couple’s wealth was still in excess of $40,000,000.
The court proceedings
The couple could not agree on how their wealth should be split. Initially the husband had assured the Wife that their assets would be divided equally between them. He later decided that they should be split 70 per cent to him and 30 per cent to the Wife.
It is interesting to note the husband’s position that he considered their contributions as equal up until the time when their youngest child became independent in the 1990’s. After that point, he submitted that the Wife’s contributions as parent and homemaker changed dramatically, whilst he continued to amass great wealth.
However, Justice Forest agreed with the Wife that “to consider a party’s contributions to the welfare of the family as of diminished significance in a long marriage where the children who that party principally parented have long grown up and left home is contrary to community expectations and also likely to be productive of injustice.”
Justice Forest went on to state that the Wife’s contributions as a homemaker and as a parent, “continued, though clearly in somewhat different form, after the date that their youngest child grew up and left home.”
“The Wife continued to contribute to the best of her capacities to the welfare of the relationship in the many varied ways that a spouse in her position does – as a homemaker, friend, companion, emotional support, confidante, lover, parent of adult children, grandparent, and the list goes on.
“The Wife’s contributions to the welfare of the relationship and the family indirectly contributed in a significant measure to the capacity of the Husband to devote himself to work and wealth generation throughout the entirety of their marriage. That his contributions might have directly produced income and, ultimately, substantial wealth, whilst hers did not, makes them, in my view at least, no more “valuable” in an overall assessment.”
In reaching his decision, Justice Forest considered the matters set out in s79(4) of the Family Law Act, including both the direct and indirect contributions the parties had made:-
- to the acquisition, conservation or improvement of their property; and
- to the welfare of their family;
as well as the effect of any property settlement on the earning capacity of either party and all of the relevant matters referred to in s 75(2) of the Act.
The presumption of equality, as a starting point in assessing contributions, was rejected. However, Justice Forest did give weight to the following, which influenced his decision:-
- contributions by a spouse to the welfare of the family, including as a homemaker and a parent, which should be recognised in a substantial and not merely in a token way;
- no relationship is recognised between a spouse’s contribution and a specific item of property when the parties’ contributions are being considered; and
- marriage is and should be regarded as a genuine partnership to which each party brings different gifts and when one party’s efforts produce great wealth that is no reason, in itself, to disadvantage the other party.
Should the “special skills” of the husband be given more weight?
The Husband argued that he had “special skills” that should be given greater weight than the contributions of the Wife. However, this argument was ultimately unsuccessful.
Although Justice Forest noted that the husband demonstrated “ability, energy, determination and drive” to help him succeed, he was equally satisfied with the quality of the Wife’s contributions throughout the marriage. This was evidenced by the Husband’s praise of the Wife and the quality of her contributions, saying that he thought she was a “fantastic homemaker” and a “terrific” parent.
The wife’s inheritance
The wife contended that an inheritance she had received about 10 years prior of $1.3 million should be allocated to her before splitting the balance of property 50/50. This would result in an overall split of 52.5/48.5 in the wife’s favour.
However, on viewing the place of her inheritance within the totality of the multitude of contributions during 49 years of marriage, the judge did not agree with the Wife on this point.
The result?
The Court concluded that dividing the wealth equally in this case, was just and equitable.
You can read the case in it’s entirety, here.
Other Article’s on Family Law
Save thousands on Stamp Duty by using a Financial Agreement
How to talk to your partner about a Cohabitation Agreement