PART 1 – Documenting a Property Settlement
So you and your partner have decided to separate. You jointly decide that you won’t engage lawyers. You’ve discussed how to divvy up your assets and liabilities and finally reached an agreement after months of argy-bargy. You’ve written it all down and both signed the piece of paper. You think that you’ve formalised your property settlement and you can both move on with your lives.
If there is one thing to learn from this article, it’s that:
An agreement about financial/property matters can only be legally enforceable if it is documented by way of CONSENT ORDERS or a FINANCIAL AGREEMENT.
Option 1: Consent Orders
Formalising your agreement by way of Consent Orders involves the preparation of two documents:
- An Application for Consent Orders (“the Application”); and
- A Minute of Consent Orders (“the Minute”).
The Application itself, while a rather clunky document at times, is a relatively straight-forward form filling exercise. The document outlines what each party’s assets, liabilities and superannuation interests are, the effect of the agreement reached (i.e. who is to retain what at settlement) and what the percentage division of the asset pool is.
The Minute is where you specially set out the Orders that you would like the Court to make in order to effect the settlement you have reached. For example, an order that one party transfer their interest in a property to another. This document typically necessitates the assistance of a lawyer as the drafting of the Orders can be complex, particularly if it involves the “splitting” of superannuation entitlements or the sale of a house. Despite this, the engagement of a lawyer is not a requirement. The Family Court of Australia website has some useful information that may be of assistance, including a “proposed orders template”.
The Application and Minute are filed with the Family Court, with an accompanying cheque in the sum of $160 (click here to confirm the current fees). A Registrar of the Family Court reviews the documents and will stamp and seal the Orders only in circumstances where they consider the Orders are just and equitable (i.e. within the range of what a Judge would be likely to award each party).
Although the Family Court is involved, neither party is required to attend Court or participate in a hearing. The Orders are made administratively.
Option 2: Financial Agreement
A Financial Agreement is an alternative to Consent Orders. A few key differences are as follows:
- A Financial Agreement is not stamped or considered by a Court (i.e. a Court does not need to be satisfied that the agreement reached is just and equitable).
- Both parties must receive independent legal advice as to the advantages and disadvantages of entering into the Financial Agreement prior to signing.
- A Financial Agreement offers the best protection to extinguishing a party’s right to claim spousal maintenance in the future.
They both document my settlement, but which one should I choose?
How you choose to formalise a settlement is wholly dependent on your individual circumstances. In some cases we prepare both!