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FORMALISING PRIVATE ARRANGEMENTS ABOUT THE DIVISION OF PROPERTY AND FINANCES WITHOUT ARGUING IN COURT
Many couples reach agreements privately about the division of their property and finances after separation. Benefits of reaching your own agreements include saving time and money if you don’t have to go to Court; significantly less stress than arguing in Court, and your financial and property affairs are determined by you, not by a judicial officer. To ensure that your arrangements are legally binding and enforceable it is important to know the law or get legal advice.
How can you formalise your private agreements?
You and your partner can either enter into a Financial Agreement to formalise your arrangements, or you can approach the Court for a Consent Order. This means you ask the Court to make a legally binding order based on your own agreements.
The Family Law Act 1975 provides that parties to a marriage (Sections 90B-90KA) or a de facto relationship (Sections 90UA-90UN) can enter into a legally binding financial agreement about their financial matters should the relationship or marriage breakdown. In fact you can enter into a financial agreement any time before, during or after a marriage or de facto relationship.
What can be covered in a financial agreement?
You and your partner can agree on the following to be included in your Financial Agreement:
- Financial settlements and property division after the breakdown of the marriage or de facto relationship, including superannuation entitlements.
- Financial maintenance/support of one party by the other after the breakdown of the marriage or de facto relationship
- Any other issues related to the above, and any other matters.
Is a financial agreement legally binding?
Section 90G of the Family Law Act provides that a financial agreement is binding if:
- Both parties have signed the agreement, and
- Both parties, before signing the agreement, received independent legal advice from a legal practitioner about the effect of the agreement on the legal rights of that party, and about the advantages and disadvantages to that party of making the agreement.
- Each party, or their legal practitioner, must be provided with a signed statement (or a copy) from the respective legal practitioners stating that such advice was provided.
Can the Court set aside a financial agreement?
Section 90K (marriage) and Section 90UM (de facto couples) of the Family Law Act 1975 set out circumstances in which the Court can declare an agreement invalid and set it aside. These circumstances include when the agreement was obtained by fraud, non-disclosure of material facts, or was entered into for the purpose of defrauding or defeating creditors. The Court will only set aside an agreement if it is satisfied that the requirements set out in Sec 90K or Sec90UM are met.
A consent order is a written agreement between you and your ex-partner that is approved by the Family Court of Australia.
When you sign a draft consent order, you indicate that you agree with the terms of the order and will comply with the terms set out in the order. You and your former partner can then apply to the Family Court of Australia to make your agreement a Consent Order without you having to argue in Court.
Before you sign the draft order you should familiarise yourself with the family law relating to children, property, maintenance, and any other issues that you include in your draft order. It is important that you understand the meaning and effect of the order that you are seeking.
The Court will only make a consent order if it is satisfied that the agreement is just and equitable.
Once the Court makes the Consent Order, it has the same effect as an order made by a judicial officer after a hearing process and each person affected by the order must comply with it.
What can you include in a Property or Financial Consent Order?
You and your partner can agree on the following to be included in the Consent Order:
- Child support/maintenance
- Parenting arrangements
- Spousal maintenance to provide support for a former partner
- Splitting of superannuation
- Transfer or sale of property; agreement on how your property, income and financial resources and debt should be shared between you.
The way your assets and debts will be divided will depend on your individual circumstances. Don’t expect yours to be similar to others that you might have heard of. Get your own legal advice before signing a draft order. What works for your friend might not be just and equitable for your situation.
How do you apply for Consent Orders?
When? You can file an application for a consent order any time after separation, but it should be filed within 12 months from the date of your final divorce, or 2 years after separation from a de facto relationship.
Where? The Courts recommend that you file your application electronically. Besides being able to eFile a range of documents, it gives you access to information about your court file online 24/7. Alternatively, you can file your application manually at a Family Law Registry of the Family Court of Australia.
Both ways you have to pay a filing fee, unless you qualify for an exemption.
Do you have to attend Court?
No, the Court will consider your application and the parties will be notified if the consent orders are made. You are not required to attend Court. If the orders are not made, you will receive notification as to why your orders were not made. If the orders were not made, you should seek legal advice on how to proceed.
Seek legal advice
It is always a good idea to seek legal advice before you enter into a binding financial agreement or file your application for a consent order. An experienced family lawyer can explain how the law applies to your situation and help you to understand your rights and obligations under the different options.