If applicable to your own property settlement, the potential earning capacity of both parties will come under scrutiny to determine a fair split in the property settlement process.
A partner’s potential earning capacity reflects how much they are capable of earning because of their skills, training, or experience. In certain circumstances a partner may have put aside their career to contribute non-financially to the family in terms of caring for children and household work. If this is relevant, then their non-financial contribution during the relationship, and loss of future earning potential should also be considered in the property settlement.
Factors That Go Into Determining The Future Potential Earnings of A Partner
Over the course of any relationship, several factors arise that determine who will be the primary breadwinner for the family, the primary caregiver for the children, and who will shoulder the greater part of the household responsibilities.
Decisions taken by the couple during the good times have an impact on potential earnings once the relationship has ended. If it was mutually agreed that one partner will stay at home to raise the children, it will influence the future potential earning capacity of that partner.
The partner who is unlikely to earn more in the future to maintain a decent lifestyle may be granted a larger share in the property settlement to meet their needs.
A brief list of the factors that lead to potential earnings adjustment are as follows:
- Break from work to care for children and household
- Mutual decision for either partner to not work outside the home
- Birth of a child and inaccessible or unaffordable childcare
- Age and health
Loss of earning capacity will influence the potential earnings adjustment.
Once you enter the relevant data, the Dekindle formula will use the information to adjust individual shares in the property settlement.
