What is Property?
When negotiating a property settlement agreement, one of the first steps to be considered is what property you and your former spouse have or own. This step is important as only property can be subject to a property settlement agreement. The Family Law Act defines property as “any property in the possession of either party, either vested or in remainder.” Property of the relationship generally includes:
- All assets that are owned, g. the family home, motor vehicles, personal items
- All assets under your control, e.g. a business, superannuation, shares and funds at bank
- All liabilities, e.g. mortgages, credit cards, hire purchase agreements
Are Employment Bonuses Property?
In the case of Ilannello & Ilannello (No 3) [2018] FCCA 3752 (19 December 2018) the Court considered the question of whether the wife’s future employment bonus payments could be the subject of a property order.
Facts of the Case
In this case, the husband had suffered a workplace accident and had been unemployed since 2013. The husband was living on a permanent disability payment from his super fund. While he owned about $78,000 in shares, he claimed that his legal fees were equally as much. On the other hand, his wife had a base salary of $190,000 per year plus employment bonuses. In the previous year, the wife received $54,000 in bonuses.
Findings
In his application, the husband had sought interim orders that split the wife’s future bonuses between them. In making its decision, the Court considered the question of whether employment bonuses amount to property. The Court said that the future employment bonuses did not actually exist at the time, and thus could not be considered property. Instead, employment bonuses can be characterised as a mere personal right and should be considered as income as opposed to property. Accordingly, while the employment bonuses could not be the subject of a property settlement order they could be taken into account when determining child support. The Judge dismissed the husband’s application and he was ordered to pay the wife’s legal costs.
For more information, visit our page on Property Settlement.
For advice about negotiating a Property Settlement Agreement contact us on 1800 300 170 or email us at familylaw@matthewsfolbigg.com.au
Disclaimer
Family law situations can be complex and sometimes they can involve serious issues. Information outlined is proposed to provide general guidance only. Due to the seriousness of legal matters as well as the uniqueness of your individual situation, professional advice should be sought. For advice, please contact one of our Family Lawyers.
